Biomethane for Transportation: Opportunities for Washington State

Biomethane for Transportation Opportunities for Washington State

A report for the Western Washington Clean Cities Coalition November 2011 Revised January 2013

American Recovery and Reinvestment Act

Biomethane for Transportation Opportunities for Washington State

A report for the Western Washington Clean Cities Coalition, prepared by Jim Jensen, Senior Bioenergy and Alternative Fuels Specialist at the Washington State University Extension Energy Program, and funded by the American Recovery and Reinvestment Act through a grant from the U.S. Department of Energy.

November 2011 Revised January 2013

An electronic version of this document is available for downloading at www.wwcleancities.org/ and www.energy.wsu.edu.

WSUEEP11-052 Rev 1 • January 2013

Biomethane for Transportation: Opportunites for Washington State Acknowledgements

This material is based upon work supported by the U.S. Department of Energy under Award Number DE-EE0002020.

The author would like to thank the following people who reviewed and provided comments for the development of this report: • Mark Fuchs, Washington State Department of Ecology; • Mary Beth Lang, Washington State Department of Agriculture; • Peter Moulton, Washington State Department of Commerce; and • Dave Sjoding, Washington State University Extension Energy Program.

The author would also like to thank the following Washington State University Extension Energy Program staff for their support and assistance: • Gil McCoy, Pauline Jensen and Caryl Gold for their valuable research; • Melinda Spencer for editing; and • Gerry Rasmussen for the artwork and design/layout of the publication.

– Jim Jensen Senior Bioenergy and Alternative Fuels Specialist Washington State University Extension Energy Program

Disclaimer: “This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.”

Biomethane for Transportation: Opportunites for Washington State i ii Biomethane for Transportation: Opportunites for Washington State Table of Contents

Acknowledgements...... i Tables, Figures and Maps...... iv Symbols, Abbreviations and Acronyms...... v

Executive Summary...... vii

Introduction...... 1 How Has Biogas Been Used in Washington State?...... 1

Chapter 1: Sources of Biogas for Biomethane...... 7 Landfills...... 7 Wastewater Treatment Plants...... 16 Livestock Producers – Dairies...... 21 Municipal Solid Waste Organics...... 25

Chapter 2: End Uses for Biomethane...... 31 Heat and Power Production...... 32 Transportation Fuel ...... 35 Pipeline Distribution of Biomethane ...... 38

Chapter 3: Converting Biomethane for Transportation Fuel...... 42 Cleaning/Upgrading Biogas...... 42 Compressing Biomethane...... 52 Distributing Compressed Biomethane...... 53 Biomethane Technology Vendors...... 57

Chapter 4: Economics of Biomethane for Transportation...... 59 California Dairy Biomethane Study...... 59 New York Biogas Processing Study...... 60 CalStart...... 61 Tillamook County Bioenergy Feasibility Study...... 62 Summary...... 64

Chapter 5: The Value of Environmental Attributes...... 66 Renewable Energy Incentives...... 66 Renewable Fuel Standards...... 66 Greenhouse Gas Reductions...... 70

Chapter 6: Policies and Incentives...... 74 Federal Policies...... 74 Washington State Policies...... 75

Chapter 7: Conclusions and Recommendations...... 77

References...... 79

Biomethane for Transportation: Opportunites for Washington State iii Tables Table 1. Potential GGE of Biomethane Produced from Various Feedstocks...... viii Table 2. Typical Sources and Characteristics of Biogas Generation...... 7 Table 3. Landfills with Biomethane Potential(Revised 2013)...... 10-11 Table 4. Wastewater Treatment Plants with Biomethane Potential...... 18-19 Table 5. Washington State Dairies and Their Biomethane Potential...... 22 Table 6. Mixed MSW Organics with Biomethane Potential by County...... 28 Table 7. Selected Feedstocks for Thermal Gasification by County...... 30 Table 8. Biomethane Gas Quality Specifications from California Utilities...... 40 Table 9. Effectiveness of Different Gas Cleanup Technologies...... 50 Table 10. Economics of Different Cleanup Technologies...... 51 Table 11. Cost of Pipeline Connects to Natural Gas Network...... 55 Table 12. Biomethane Technology Vendors...... 57-58 Table 13. Estimated Costs for Hypothetical Dairy Biogas-to-Biomethane Projects...... 60 Table 14. CalStart – Estimated Costs for Upgrading to Biomethane...... 62 Table 15. CalStart – Estimated Total Costs for Upgraded Biomethane...... 62 Table 16. Tillamook Bioenergy Feasibility Study – Financial Modeling Projects...... 63 Table 17. Renewable Fuel Types in RFS2...... 67

Figures Figure 1. Transportation Energy Price Projections...... 2 Figure 2. Number of Alternative Fuel Vehicles and Fuel Displacement by DOE’s Clean Cities Program...... 3 Figure 3. Typical Landfill Gas Capture Installation...... 9 Figure 4. Typical Flow of Landfill Gas Over Time...... 14 Figure 5. Biogas Upgrading and End Use Pathways...... 33 Figure 6. Biomethane Upgrading Technology: Water Scrubbing...... 43 Figure 7. Biomethane Upgrading Technology: Physical Scrubbing...... 44 Figure 8. Biomethane Upgrading Technology: Chemical Scrubbing/Chemical Absorption...... 45 Figure 9. Biomethane Upgrading Technology: Pressure Swing Adsorption...... 46 Figure 10. Biomethane Upgrading Technology: Cryogenic Separation...... 47 Figure 11. Biomethane Upgrading Technology: Membrane Systems...... 48 Figure 12. Biomethane Upgrading Technology: Biological Filters...... 49 Figure 13. Biomethane Costs...... 65 Figure 14. Renewable Fuel Standard Mandates, by Type, 2008-2022...... 67 Figure 15. Well-to-Wheel GHG Emissions...... 70 Figure 16. GREET Estimates of the PTW, WTP and WTW Fuel Use and Emissions by Technology...... 71

Maps Map 1. Washington State Landfills with Biomethane Potential(Revised 2013)...... 13 Map 2. Selected Washington State Wastewater Treatment Plants with Biomethane Potential ...... 20 Map 3. Washington State Dairies, Digesters, and Natural Gas Pipelines...... 23

iv Biomethane for Transportation: Opportunites for Washington State Symbols, Abbreviations and Acronyms

AD...... Anaerobic digestion AFDC...... Advanced Fuels Data Center AFV...... Alternative fuel vehicle ARRA...... American Recovery and Reinvestment Act bio-CNG...... Compressed natural gas from biomethane bio-LNG...... Liquified natural gas from biomethane Btu ...... British thermal unit (1 Btu = 1.055 kilojoules) °C ...... Degrees Celsius (°F = 9/5 °C+32) CARB...... California Air Resources Board CAR...... Climate Action Reserve cf...... cubic feet

CH4...... Methane CHP...... Combined heat and power CNG...... Compressed natural gas Commerce...... Washington State Department of Commerce

CO2...... Carbon dioxide CTE...... Center for Transportation and the Environment DGE ...... Gallons of diesel-equivalent DOE...... U.S. Department of Energy Ecology...... Washington State Department of Ecology EISA...... Energy Security and Independency Act, also known as RFS EPA...... U.S. Environmental Protection Agency °F...... Degrees Fahrenheit [°C = 5/9 (°F-32)] FOG...... Fats, oil, and grease ft ...... Foot or feet (1 ft = 0.3048 meter) gal ...... Gallon (1 gal = 3.785 liters) GGE ...... Gallons of gasoline-equivalent GHG...... Greenhouse gas gpd ...... Gallons per day GREET...... Greenhouse Gases, Regulated Emissions and Energy Use in Transportation GRI...... Gas Research Institute GTI...... Gas Technology Institute

H2O ...... Water hr ...... Hour

H2S ...... Hydrogen sulfide HSAD...... High solids anaerobic digestion kW ...... Kilowatt kWh ...... Kilowatt-hour L ...... Liter (1 L = 0.2642 gallon) Land GEM...... EPA’s Landfill Gas Emissions Model lb ...... Pound (1 lb = 0.4536 kilogram) LCFS...... Low-carbon fuel standard LFG...... Landfill gas LMOP...... Landfill Methane Outreach Program LNG...... Liquefied natural gas LPG...... Liquefied petroleum gas

Biomethane for Transportation: Opportunites for Washington State v MBtu ...... Million Btu MMBtu ...... Million Btu (as in a thousand thousand Btu) mg ...... Milligram (1 mg = 0.0154 grain) MGD...... Million gallons per day MJ...... Megajoule Mpg...... Miles per gallon MSW...... Municipal solid waste MW ...... Megawatt MWh ...... Megawatt-hour Nm3 ...... Normal (dry standard) cubic meter (1 Nm3 = 35.31 normal cubic feet)

NOx ...... Nitrogen oxides

O2 ...... Oxygen O&M...... Operations and maintenance PG&E...... Pacific Gas and Electric PM ...... Particulate matter

PM10...... Particulate matter less than 10 micrometers in diameter POTW...... Publicly Owned Treatment Works ppm ...... Parts per million psi ...... Pounds per square inch (1 psi = 0.06804 atmosphere) PTW...... Pump-to-wheel REC...... Renewable energy credits RGGI...... Regional Greenhouse Gas Initiative RLNG...... Renewable liquefied natural gas RNG...... Renewable natural gas RFS...... Renewable Fuel Standard RIN...... Renewable Identification Number RPS...... Renewable Portfolio Standard scf ...... Standard cubic foot or feet (1 scf = 0.0283 standard cubic meter) scfm ...... Standard cubic foot or feet per minute

SO2...... Sulfur dioxide STP...... Sewage treatment plant tpd ...... Tons per day (1 tpd = 0.9072 megagram per day) VRI...... Vehicle Research Institute WERF...... Water Environment Research Foundation WSU...... Washington State University WTP...... Wheel-to-pump WTW...... Well-to-wheel WWTP...... Wastewater treatment plant WWU...... Western Washington University

vi Biomethane for Transportation: Opportunites for Washington State Executive Summary

Biomethane refers to the gas produced by cleaning and upgrading biogas produced through anaerobic digestion of organic by-products, such as wastewater solids, livestock manure, food wastes, and yard debris. After removing carbon dioxide

(CO2) and other gases, the remaining methane is essentially the same as natural gas and can be used in all the ways natural gas is used. For this reason, biomethane is also called renewable natural gas or green gas.

This report looks at the potential opportunities for producing biomethane for transportation uses in Washington. This assessment supports the goals and objec- tives of the Western Washington Clean Cities Coalition to reduce petroleum use, reduce air pollution, reduce greenhouse gas pollution, and support local economic development in the process.

This analysis provides a high-level review of the possible sources of biogas, likely end users for this alternative fuel, technologies needed to produce and compress biomethane, and results of economic analyses of these technologies. This analysis was designed to define the range of uses/products for biomethane and the competition it faces from natural gas and other alternative fuels.

The primary sources for producing biomethane in Washington include biogas produced: • At landfills, wastewater treatment plants, dairies, and other livestock operations; • By anaerobic treatment of the organic fraction of municipal solid waste (MSW); and • Through thermal gasification of crop residue and woody wastes.

In total, excluding any gas production from thermal gasification, this assessment estimates that the different feedstocks available in Washington could produce as much as 512,418 gas gallon equivalents (GGE) of biomethane per day, as presented in Table 1.

In considering biomethane potential from different sources, it is important to remember that the potential biomethane from landfills is produced from organic wastes landfilled over decades of time and will not be constant throughout the future. This assessment is based on the estimated potential in the next 10-15 years. Biomethane potential from WWTPs, livestock producers, and municipal solid wastes is more constant and may be expected to increase due to increases in population and in collection and processing efficiency.

The end uses compared in the assessment include biogas/biomethane for heat and power, for direct use as transportation fuel, and for injection into the natural gas pipeline network for either power or transportation. All of these possible uses have different costs and benefits that developers and policymakers must consider. This report presents reviews of the technology choices and economics of preparing

Biomethane for Transportation: Opportunites for Washington State vii Table 1. Potential GGE of Biomethane Produced from Various Feedstocks

Feedstock Gas Gallon Equivalents Evaluation Sources per Day (GGE/d) The gas at landfills and wastewater treatment plants (WWTPs) is largely already being pro- Landfills 354,960 GGE/d duced and used partially or flared. For this reason, landfills and WWTPs are a good first target for using biogas for transportation. The LRI Landfill and the Tacoma-Central and Wastewater University Place-Chambers Creek WWTPs were 36,829 GGE/d Treatment Plants identified as early candidates that are ready to receive technical assistance and support. Estimates for dairies and MSW digesters are considered “potential” at this time, meaning that a lot of investment in plants and equipment needs to occur to capture some of that potential. The Dairies 61,344 GGE/d regions around Yakima and Whatcom counties provide the largest opportunities to develop projects for direct use of biomethane or for pipeline injection of biomethane for transportation end uses. MSW digesters planned at Cedar Grove MSW Digesters 59,285 GGE/d Composting in Everett and Barr-Tech in Spokane may benefit from a transportation component.

biomethane for transportation. Biomethane is roughly half the cost of diesel; however, in comparison with natural gas as a source of compressed natural gas (CNG) for vehicles, biomethane is about twice the cost. For this reason, at this time, quantifying and supporting mechanisms that value or monetize the renewable attributes of biomethane are crucial to its success in the market.

The mechanisms that already exist include the federal Renewable Fuel Standard and California’s Low Carbon Fuel Standard. Policies that could further support the value of biomethane in relation to other fuels include adoption of a federal and/or state low carbon fuel standard, carbon taxes, or cap-and-trade mechanism to create market incentives for greenhouse gas reduction.

The report concludes with a series of recommendations to support further development of transportation, starting with support for basic investments in natural gas infrastructure and natural gas vehicles. Investing in CNG fueling stations and vehicles anywhere enlarges the access that biomethane producers have to markets through natural gas pipelines. Co-locating public CNG fueling stations near sources of biomethane in urban areas or at transportation nodes in rural areas provides even greater benefit. Finally, it is important to provide direct support for plants and the equipment needed to produce biogas from agricultural and municipal organic wastes. It would be helpful if federal grants treated transportation end uses equitably with heat and power end uses.

viii Biomethane for Transportation: Opportunites for Washington State Introduction

In the absence of oxygen, decomposing organic materials produce biogas – a combination of methane (CH4), carbon dioxide (CO2), and other gases. Biogas produced from different sources will have varying concentrations of methane. Biogas is most often found to have between 50 and 65 percent methane, with corresponding energy values of 500 to 650 British thermal unit (BTU) per cubic foot. Natural gas delivered to customers is effectively 100 percent methane and has an energy value of about 1,000 BTU per cubic foot. If raw biogas is processed and cleaned to remove moisture, CO2, hydrogen sulfide and other gases from the methane, we call the end product “biomethane” or “renewable natural gas.” The BTU content can be made equivalent to that of natural gas.

Natural gas (“fossil biogas”) is found in underground reserves formed millions of years ago. Biogas continues to form naturally in bogs and swamps (hence its historic name, “swamp gas”). Biogas is also a natural by-product of burying organic materials in landfills and keeping liquid manure in storage lagoons. In the last century, scientists and engineers found economic value in treating sewage wastewater solids using the same anaerobic digestion principles that produce biogas. More recently, engineered anaerobic digestion systems have begun to be used to convert a wider range of organic waste resources, such as dairy and other livestock manures and food processing wastes, into biogas and a range of valuable co-products.

While initial interest in anaerobic digestion may have been prompted by the need to manage wastewaters for odor control, public health, and environmental safety, the similarity of biogas and natural gas was not lost. As a result of much experimentation and innovation, biogas has been used in the same ways one might use natural gas – to fire stoves, boilers, furnaces, engines, and generators, and as transportation fuel. Each end use has its own challenges and barriers, which are being addressed by those who actively support these uses.

How Has Biogas Been Used in Washington State? Residents and businesses in the state have enjoyed very low energy prices for many years. As a result, many landfills in the state simply managed the biogas they collected by burning it in flares. At wastewater treatment plants (WWTPs), operators typically used biogas to fuel boilers for the heat needed by their digesters but otherwise flared their surplus biogas.

This historic pattern has changed recently (see Figure 1). The cost of petroleum products and electricity has risen, while natural gas prices have dropped due to shale gas fracking technology. In addition, greater emphasis is being given to renewable forms of energy. Now the largest landfills and WWTPs, and some of the smaller ones, look for productive, cost-effective uses for the biogas they produce. The most common uses include producing electricity, heat, combined heat and power (CHP), or cleaning the gas for delivery into natural gas pipelines. An additional use as transportation fuel is now gaining attention.

Biomethane for Transportation: Opportunites for Washington State 1 Figure 1. Transportation Energy Price Projections (EIA Reference Case)

1 Sales weighted-average price for all grades. Includes federal, state and local taxes. 2 Diesel fuel for on-road use. Includes federal and state taxes while excluding county and local taxes. 3 Compressed natural gas used as a vehicle fuel. Includes estimated motor vehicle fuel taxes and estimated dispensing costs or charges. Source: DOE EIA Annual Energy Outlook 2011 with Projections to 2035

Benefits and Challenges of Using Biomethane for Transportation Major reasons to focus on biomethane as a transportation fuel include: • The rising price of gasoline and diesel fuel, which is intensifying the search for cheaper alternatives; • The need to improve air quality; and • The need to reduce greenhouse gas (GHG) emissions.

Worldwide, as many as 12 million natural gas vehicles are in use (Yborra, 2011). In the United States, the number of natural gas vehicles in operation changed from 105,000 in 2000 to 110,000 in 2009. That represents just 0.06 percent of all vehicles. The number of CNG refueling stations in the United States reached 1,300 in 2009 (CNGVA, 2010).

2 Biomethane for Transportation: Opportunites for Washington State Using biogas as a replacement fuel for diesel provides important benefits: • Reduce air pollution, including particulate matter. • Reduce dependence on fossil fuels and foreign sources of petroleum because biomethane is a renewable form of domestic fuel. • Reduce GHG pollution by capturing and using biogas from fugitive sources, such as landfills and manure lagoons.

The U.S. Department of Energy supports energy efficiency and renewable energy development through a variety of programs: • CHP is supported through the Industrial Technologies Program. • Biofuels get support through the Office of Biomass Programs. • Vehicle efficiency gets support through the Vehicle Technologies Program. • Biomethane transportation infrastructure and deploying vehicles using CNG and liquefied natural gas (LNG) from renewable sources are supported through the Clean Cities Program.

In 2008, CNG- and LNG-powered vehicles accounted for most of the GGEs of petroleum displaced by the 624,000 alternative fuel vehicles sponsored by Clean Cities programs (see Figure 2), even though they accounted for only 9 percent of these vehicles. CNG and LNG vehicles accounted for more than 40 percent of total reported petroleum displacement by all measures (Richardson, 2010).

Figure 2. Number of Alternative Fuel Vehicles and Fuel Displacement by the Department of Energy’s Clean Cities Program

Biomethane for Transportation: Opportunites for Washington State 3 A recent report entitled, “The Potential for Renewable Gas,” (Gas Technology Institute, 2011), summarized the advantages and national benefits of biomethane: • It is another source of domestically produced energy. Under the two practical long-term scenarios that were considered for this study, the market potential of renewable gas is from 1.0 to 2.5 quadrillion BTUs per year. The technical potential, representing complete utilization of all available feedstocks, is approximately 9.5 quadrillion BTUs per year. • The job creation potential of renewable biogas projects is significant. The number of direct jobs created ranges up to 83,000, depending on the depth of the market penetration. Using an average multiplier of 3.1 for indirect and induced jobs, the total number of jobs created ranges up to 257,000. • Depending on the model of deployment, renewable biogas

production could result in 146 million metric tons of CO2 removed from the air annually – the equivalent of taking 29 million cars off the road. • The California Air Resources Board (CARB) in a 2009 report determined that biomethane is the lowest carbon transportation fuel available today. • Almost every state in the United States has the resources to participate in the production of renewable gas and, along with it, the potential to create new green jobs. • Biomethane from renewable sources, including animal manure, forest residues, and agricultural wastes, can be produced at efficiencies ranging from 60 to 70 percent, which uses renewable resources in a responsible and efficient manner. • All of the technology components needed to produce renewable biogas from this variety of biomass sources exist today. • Biogas production in digesters provides the agricultural sector additional environmental benefits by improving waste management and nutrient control, and by dramatically reducing carbon emissions through the control of methane by placing manure in enclosed vessels instead of open lagoons. • Biomethane is an interchangeable fuel that can be delivered to customers via the existing U.S. pipeline infrastructure and can provide a renewable energy option in the natural gas energy market, which represents 25 percent of overall U.S. energy use. • Biomethane is, in many instances, the low-cost option among renewable products.

The Clean Cities-sponsored report on biomethane entitled, “Renewable Natural Gas: Current Status, Challenges, and Issues,” listed the following major obstacles to the widespread development and use of biomethane, or renewable natural gas (RNG):

For RNG, the major barriers to significant deployment are a lack of customers (i.e., demand) for the produced fuel, the cost and logistics

4 Biomethane for Transportation: Opportunites for Washington State of delivering it, immature and unproven technologies, and restrictions mandating what can and cannot be a part of the project.

• Customers. Demand is critical for all aspects of the project, from the initial design and sizing of components and processes, to maintaining efficient operations, to generating acceptable profits and cash flow.

• Distribution. New pipelines are the preferred mode for trans- porting gaseous RNG from the production facility to the pipeline system (in the case of pipeline injection) or to the final user (in the case of motor vehicle fleets). However, pipeline construction is expensive and the additional investment may not be feasible. This is especially true if the market consists of a handful of vehicle fleets not readily accessible via a single pipeline. Since liquid RNG is more readily transported, liquefaction is sometimes used to aid distribution, even if demand is for gaseous product.

• Technologies. Small-scale liquefaction is not an established technology. Developers are making progress in the design and integration of refrigeration into process flows and in improving reliability and efficiency.

• Permitting and legal restrictions. Most RNG projects incorporate a biogas-fueled generator to provide electricity for process needs and refrigeration/compression. Permitting can be difficult for this “new source,” especially in California. Similarly, restrictions on pipeline injection can limit this type of project to certain biogas sources.

• Refueling facilities. Because producers of RNG require markets for their product, a lack of refueling facilities is also a barrier to the deployment of RNG. Here, however, refueling facilities are viewed less as part of the infrastructure needed to support deployment and more as customers of the produced fuel.

This analysis looks at these and other issues affecting the viability of producing and using biomethane for transportation in Washington. It looks broadly at potential sources of renewable biogas, the technologies used to upgrade raw biogas into biomethane, the potential end-user fleets and the challenge of getting the gas to them. It also considers the economics of using biomethane and the importance of putting a value on the clean, renewable attributes of biomethane. A series of recommendations are offered at the conclusion.

Biomethane for Transportation: Opportunites for Washington State 5 6 Biomethane for Transportation: Opportunites for Washington State Chapter 1: Sources of Biogas for Biomethane

Raw biogas, capable of being processed into biomethane, may be produced by a variety of processes that receive or manage organic waste streams.

Key sources in Washington include, in no particular order: landfills, municipal and industrial wastewater treatment plants (WWTPs), and anaerobic digesters using agricultural, food processing, and/or municipal organic wastes. Biomethane for transportation fuel can also be an end product of thermal gasification of more fiberous or woody waste byproducts.

The resulting biogas may have varying energy values (as measured in British thermal units [BTU]) and complex mixes of other trace gases, reflecting the wide range of byproducts, or feedstocks, used in its production. These variations can complicate end use options. Table 2 shows the different gases that may be found in biogas from different sources.

The end use for the biomethane guides the degree of gas cleaning or upgrading that is required. In general, the energy value of gas is measured in BTU. Commercial natural gas is effectively 100 percent methane with some water vapor, with an energy value of 1,000 (+/- 50) BTU per cubic foot. Specifications among natural gas companies can vary, but to mix with other gas in transmission pipelines, a biomethane product would need to have nearly 985 BTU and little to no trace gases. For vehicle use, the gas would still have to be scrubbed of hydrogen sulfide, siloxane, and other trace gases, but engines can tolerate as much as 10 percent CO2, so the upgrade required may only be to 900 BTU per cubic foot.

Landfills Landfills generate raw biogas through anaerobic decomposition of organic waste materials, such as food waste and yard and garden debris found in mixed municipal waste streams. There was a time not long ago when biogas seeped out of unlined

Table 2. Typical Sources and Characteristics of Biogas Generation

Sources Common Characteristics

Methane (CH4), carbon dioxide (CO2), hydrogen sulfide (H S), water vapor, other sulfides and mercaptans, siloxane, Landfills 2 nonmethane organic compounds, oxygen, nitrogen, ammonia, and other trace gases CH , CO , H S, water vapor, siloxanes, and possibly traces Wastewater treatment plants 4 2 2 of nitrogen and ammonia

Dairy manure CH4, CO2, H2S, and water vapor

Food processing byproducts CH4, CO2, H2S, and water vapor CH , CO , H S, water vapor, siloxanes, other gases in trace Municipal organic wastes 4 2 2 amounts

Biomethane for Transportation: Opportunites for Washington State 7 landfills and caused problems in surrounding neighborhoods. Today, engineered landfills are located away from metropolitan areas, and they are more enclosed, with thick plastic liners along the sides, bottoms, and tops of a series of landfill “cells.” Garbage is deposited in layers and covered each day. Biogas begins forming right away. As individual cells reach capacity, federal regulations require operators of most landfills to install gas collection systems to remove the landfill gas to prevent it from migrating. However, most of this gas is still burned in flares.

According to the U.S. Environmental Protection Agency (EPA) Landfill Methane Outreach Program (LMOP), there are 558 operational landfill energy projects in the United States. The vast majority of these generate electricity. The next The Roosevelt Regional Landfill is the fourth largest group uses the biogas for direct largest permitted landfill in the United States. thermal applications and cogeneration of Source: Klickitat PUD electricity and heat. Roughly 30 projects produce biomethane, mostly for pipeline uses. Only a handful of landfills produce biomethane directly for transportation uses (EPA, LMOP, 2011).

The EPA identifies about 500 more landfills that have the size and characteristics to be “candidate landfills” for energy projects. This potential for energy production nationwide (perhaps as biomethane) was discussed during the U.S. Department of Energy (DOE) Waste to Wheels Workshop in 2010. It reported the following:

In 2008, according to the annual BioCycle/Columbia University survey of state data on solid waste management, 270 out of 389 million tons (69 percent) of mixed solid waste generated were deposited in landfills. Between 50 and 60 percent of this amount consisted of organic materials. [DOE claims] if just 1 million tons of these mixed wastes – a typical amount for a mid-sized city in a region having average rainfall – were deposited in the same landfill over a 20-year period, these wastes would emit, at peak yield, enough biogas annually to make the equivalent of 15 million diesel gallons (Richardson, 2010). [For comparison, Washington drivers can use 15 million gallons of diesel in a few days.]

While today’s larger, more highly engineered landfills can produce sufficient biogas to make electricity or transportation fuel, landfills are not considered the most efficient way to capture biogas from municipal solid waste (MSW). Critics point out that landfills have a limited lifespan, and they lose a significant fraction of biogas potential because decomposition occurs prior to gas collection. They also point to pollution problems related to the contaminants in landfill gas(Ewall, 2007). Using

8 Biomethane for Transportation: Opportunites for Washington State landfill gas has some significant challenges, as it often contains a wider array of contaminant gases, including siloxanes, oxygen nitrogen, and even toxic gases not found in biogas from other sources.

Washington State law established a hierarchy for solid waste management that puts landfilling at the bottom of the best practices for waste handling. The Washington State Department of Ecology Waste 2 Resources Program (www.ecy.wa.gov/programs/ swfa) works to keep non-contaminated organic material out of the state’s landfills and to identify new management technologies and new markets for products made from this organic material.

Project Assessment For this assessment of biomethane potential from Washington landfills, the project team consulted a wide variety of data resources, especially reports and databases maintained by the EPA and the Washington State Department of Ecology, to develop a database of Washington landfills. The data was analyzed to identify landfills of sufficient size and age. Landfills that were closed prior to 1999 were excluded.

Figure 3. Diagram of Typical Landfill Gas Capture InstallationFigure 3. Diagram of Typical Landfill Gas Capture Installation

Gas Extraction Well Sampling Port

Gas Collection Pipe Perforated or Slotted Plastic

Landfill Ground Surface Waste Vacuum

Gas Collection Gas Extraction Pipe Source: EPA Well Active Gas Collection System

Biomethane for Transportation: Opportunites for Washington State 9 Table 3. Washington State Landfills with Biomethane Potential

Waste Waste Year Closure County Facility Name Location per Year in Place Opened Year tons tons Roosevelt Reg. Klickitat Roosevelt 1991 2041 2,088,177 53,000,000 Landfill Cedar Hills King Maple Valley 1965 2018 867,482 33,000,000 Reg. Landfill LRI Landfill Pierce Graham 2000 2050 1,031,084 11,341,000 (304th St.) Greater East Douglas Wenatchee 1975 2020 181,075 2,008,248 Wenatchee Reg. Landfill Terrace Heights Yakima Yakima 1974 2019 161,330 3,727,219 Landfill Cowlitz County Cowlitz Longview 1974 2014 96,165 2,100,000 Landfill B

Hidden Pierce Puyallup 1965 1998 435,632 17,425,280 Valley

Port Kitsap Olympic View 1960 2002 166,768 7,004,248 Orchard Asotin Asotin Clarkston 1975 2025 47,290 848,342 County City of Tacoma Pierce Tacoma 1960 1998 124,683 5,610,756 Landfill Grant Ephrata Landfill Ephrata 1942 2005 90,517 NA Richland Benton Richland 1975 2018 53,000 NA Horn Rapids Cheyne Road Yakima Zillah 2010 2035 71,104 1,198,976 LF Cell 2 Walla Sudbury Road Walla Walla 1972 2007 52,929 1,102,917 Walla Landfill Hawks Prairie Thurston Olympia 1970 2000 71,192 2,135,753 Landfill* Cheyne Rd LF Yakima Zillah 1968 2010 29,974 1,198,976 Cell 1 (unlined) Fort Lewis Pierce Fort Lewis 1969 2004 34,255 1,198, 910 Landfill #5 Clallam Port Angeles SLF Port Angeles 1972 2006 30,176 1,026,000 Okanogan Okanogan Okanogan 1994 2030 27,498 407,820 Central Stevens Stevens County Kettle Falls 1979 2054 24,000 NA

*Operated by the Thurston County Waste & Recovery Center

10 Biomethane for Transportation: Opportunites for Washington State Table 3. Washington State Landfills with Biomethane Potential, continued

GGE Biomethane Biomethane Gas Potential Facility Name Potential Potential Current Gas Use Trend EST EST m3/yr EST cf/d GGE/d Roosevelt Reg. Reciprocating Engine, 140,000,000 13,545,479 Increasing 108,364 Landfill Klickitat PUD Power Cedar Hills Bioenergy Washington, Reg. 120,000,000 11,610,411 Peaking 92,883 High-BTU to Pipeline Landfill to Puget Sound Energy LRI EPA Candidate; Landfill 100,000,000 9,675,342 Increasing 77,403 Contract for use with (304th St.) Biofuels Energy, LLC Greater Flare; EPA Candidate; Wenatchee 15,000,000 1,451,301 Peaking 11,610 Considering Power Reg. Landfill Project Terrace Heights Flare; 13,300,000 1,286,821 Peaking 10,295 Landfill EPA Candidate Cowlitz County Flare; EPA Candidate; 12,000,000 1,161,041 Peaking 9,288 Landfill B Possible Pud Project Hidden Reciprocating Engine 10,000,000 967,534 Decreasing 7,740 Valley (Puyallup Energy Recovery) Leachate Evaporation- Olympic View 9,500,000 919,158 Decreasing 7,353 Project Shutdown 2009 Asotin Flare; Desires Future 4,300,000 416,040 Increasing 3,328 County Energy Project City of Tacoma Reciprocating Engine; 5,500,000 532,144 Decreasing 4,257 Landfill NEO Corp Ephrata Landfill 5,250,000 507,955 Decreasing 4,064 Flare Horn Rapids 3,902,000 377,532 Peaking 3,020 Flare Cheyne Road LF Flare; 2,000,000 193,507 Increasing 1,548 Cell 2 EPA Candidate Sudbury Road Flare; 3,200,000 309,611 Decreasing 2,477 Landfill EPA Candidate Hawks Prairie Flare; Closed; 3,000,000 290,260 Decreasing 2,322 Landfill No Evidence of Gas Use Cheyne Rd LF Flare; 2,100,000 203,182 Decreasing 1,625 Cell 1 (unlined) EPA Candidate Fort Lewis No Flare; 2,000,000 193,507 Decreasing 1,548 Landfill #5 EPA Candidate Port Angeles Flare; 2,000,000 193,507 Decreasing 1,548 SLF EPA Candidate Okanogan 2,532,000 244,980 Increasing 1,960 Flare Central Stevens County 3,004,000 290,647 Increasing 2,325 Flare Total 44,369,960 354,960

Biomethane for Transportation: Opportunites for Washington State 11 Table 3 presents the results of the assessment. It provides data about 20 active or recently closed landfills located around the state – 11 of these are still receiving waste. Data is included for the estimated volumes of waste received LRI Landfill per year and the total waste in place Biomethane Opportunity at the landfills. The project team used the EPA’s Landfill Gas Emissions Model The LRI Landfill in Pierce County, owned (LandGEM)(version 3.02) to calculate by Waste Connections, has signed a the biomethane potential. LandGEM long-term agreement with Biofuels Energy, LLC, to manage the landfill gas generates an arc of gas outputs for stream for energy production. At the LRI future years based on the volumes of Landfill, Biofuels Energy reports current solid waste disposed over time. Based biogas production of more than 3,000 on the annual gas outputs estimated, standard cubic feet per minute (scfm). the team looked forward 10 to 15 years Their gas projection models suggest that output could increase to 5,000 scfm in for a reasonable figure to use for annual 10 years and 8,000 scfm in 15 years. potential. The team also considered whether the gas output trend was Planning and development for the proj- increasing, peaking, or decreasing. ect is occurring at a brisk pace. The first This is noted in the table. Using these phase of development will use about two-thirds of current gas production for annual data, estimates for daily gas a hybrid electricity-compressed natural output were calculated,followed by gas (CNG) project. On-site electricity the potential displacement in gasoline production will support operations and gallons equivalent (GGE). future development. The landfill gas will be upgraded using AirLiquide’s membrane conditioning process – like the The landfill source assessment also process used at the Cedar Hills Landfill includes a column that highlights what in King County. is known about current gas uses. It also shows if a landfill has been identified The first phase of CNG development by EPA’s LMOP as a candidate site, will use cleaned gas to produce more than 800,000 diesel gallon equivalents meaning it has sufficient waste in place (DGEs) per year of CNG for transporta- to be considered for energy project tion uses, enough fuel for more than development. 150 heavy-duty diesel trucks per year. Company representatives indicate that Discussion while transportation uses are a high priority for the Pierce County project, One of the bigger challenges of they are looking to see if the region assessing landfill gas (LFG) potential is embraces the opportunity to use bio- that gas production is not consistent CNG before deciding how much of the from one site to another. For example, second phase of development is used over the last two decades, communities for transportation fuels. around the state, especially larger urban With sufficient interest, the second areas in western Washington, have phase could add more than 2.5 million made great strides in removing organic DGEs annually, supporting close to 450 waste materials from their municipal heavy-duty trucks (Mazanec, 2011). waste streams, which can reduce the yield of biogas produced at these sites. The data developed for this assessment

12 Biomethane for Transportation: Opportunites for Washington State Map 1. Landfills with Biomethane Potential 2 195 Spokane Pullman 90 Asotin County Stevens County Colville 12 Sudbury Road 395 Landfills (Open) Landfills (Closed or closing) Naural Gas Pipelines 395 2 New Waste Pasco Horn Rapids Moses Lake 82 Ephrata 97 Omak Richland Cheyne Road 1 Greater Wenatchee Wenatchee Roosevelt Regional Terrace Heights Terrace Okanogan Central Sunnyside 97 97 Cheyne Road 2 2 Yakima Ellensburg 90 12 14 Cedar Hills Mount Vernon LRI Landfill Hidden Valley Seattle 5 Fort Lewis Everett Centralia Cowlitz County Tacoma Washington State Landfills with Biomethane Potential Washington 5 Olympia Bellingham 12 Bremerton Vancouver City of Tacoma of City Longview Hawks Prairie Olympic View Port Angeles 101 Aberdeen

Biomethane for Transportation: Opportunites for Washington State 13 is useful generally for identifying potential targets for further project development; to develop more precise figures for project development, more detailed feasibility studies are warranted.

Another challenge of estimating the potential size of landfill energy projects is that gas production is not constant over time. In each landfill cell, there is an extended ramp-up period, followed by a period of peak output, followed by a long decline. This phenomenon is illustrated in Figure 4 from a study reported by the DOE Clean Cities Program.

This figure illustrates a typical LFG generation and recovery profile for a site opened in 1980 at which peak recovery occurs in 2014. In conventional landfills, gas recovery typically begins slowly, 10 to 15 years after the waste is deposited, and continues for several decades. In newer designs (e.g., conventional cells with leachate circulation), accelerated waste stabilization permits economic recovery to begin much earlier, typically within five years of waste deposition EPA,( 2011).

A final concern of some critics of landfill gas projects is the potential for harmful emissions from the combustion of landfill gas containing toxic contaminants (Ewall, 2007). The challenge is to thoroughly analyze the available gas for all substances; install clean-up technology that also removes any toxic compounds; and effectively dispose of, not burn, any hazardous material.

Project Candidates The landfill assessment found that five landfills have actively used biogas for productive purposes, ranging from leachate evaporation to electricity production. One site, the Cedar Hills Landfill in King County, cleans the gas for delivery into the natural gas pipeline. Puget Sound Energy (PSE) uses the pipeline gas to produce electricity at a natural gas generating station. To date, there are no dedicated vehicle fueling projects using landfill gas in Washington.

Figure 4. Typical Flow of Landfill Gas Over Time

14 Biomethane for Transportation: Opportunites for Washington State The assessment also found that EPA identifies nine landfills as “candidate” sites, meaning that their analysis suggests that these sites have good potential for profitable gas-to-energy projects. The EPA published briefs on two of these candidate sites, the Port Angeles Landfill and the Fort Lewis Landfill.

In addition to these opportunities, Waste Connections has signed an agreement with Biofuels Energy, LLC, to manage the landfill gas stream for energy production at the LRI Landfill in Pierce County. Biofuels Energy brings relevant experience to the project, having recently completed a large-scale biomethane project at the Point Loma Wastewater Treatment Plant near San Diego (Mazanec, 2011).

Biomethane for Transportation: Opportunites for Washington State 15 Wastewater Treatment Plants

Wastewater treatment plants (WWTPs) are another significant source of biogas. These facilities include municipal or county WWTPs that manage sewage wastewater from homes and businesses. They can also include industrial wastewater treatment at food processing and beverage facilities. The United States has thousands of WWTPs that use a vast array of mechanical, biological, and chemical processes to treat the wastewater and the wastewater solids that result.

The DOE reported the following information about wastewater treatment facility energy potential during its 2010 Waste to Wheels Workshop:

Of the more than 16,000 wastewater treatment plants in the U.S., approximately 3,500 of the largest already have anaerobic digesters on site, along with the expertise needed to operate them. The primary functions of these digesters are to reduce the volume of sludges by 40 to 60 percent (which makes their final disposal less costly) and to control pathogens and odor in compliance with regulations. About half of these digesters simply burn the gas off. Plants seeking to increase the energy content of digester gas can “co-digest” additional organic wastes along with the sludges – typically fats, Chambers Creek Wastewater Treatment Plant oils, and grease (FOG) and food serves Pierce County residents. Source: Pierce County processing wastes – following the example of the East Bay Municipal Utility District. This strategy can increase gas production by up to 40 percent with as little as a 10 percent increase in feedstock volume (Richardson, 2010).

Project Assessment For the WWTP assessment, various sources were evaluated, especially reports and databases maintained by the EPA and the Washington State Department of Ecology. Ecology maintains a public database of wastewater discharge permits that provides valuable information about the hundreds of WWTPs in the state.

A database of Washington’s municipal WWTPs was created for this report. The data were analyzed to identify projects that had anaerobic digesters that produce biogas and that were of sufficient size to have development potential. Several sources point to the 5 million gallon-per-day (MGD) threshold that EPA identified as being necessary to justify evaluation for profitable use of the energy in the biogas Eastern( Research Group, 2007).

16 Biomethane for Transportation: Opportunites for Washington State Table 4 shows the results of the assessment. It provides data about 31 facilities in the state that have anaerobic digesters and average flows near or above 4 MGD. Facilities smaller than the EPA threshold were included Simplot’s on the chance that they might expand in the future. Average daily flow data Biogas Project from public sources is included. From As the nation’s leading supplier of these data, calculations were made of potato products to consumers, J.R. the biomethane potential; from that, Simplot Company has numerous pro- the potential displacement in GGEs was cessing plants located around the Pacific estimated. Northwest. Each facility generates millions of gallons of wastewater daily from washing, peeling, and sizing A gap in our research to date involves potatoes into french fries and other biogas production from anaerobic products. digestion of high-strength industrial wastes, such as at food and drink In 2007, Simplot began operating an anaerobic digestion system at its processing facilities. Records of the processing plant in Moses Lake, WA. It is municipal WWTPs indicate that a simple system, consisting of a covered substantial quantities of this food anaerobic lagoon capable of storing and processing material are managed at digesting 20 million gallons of wastewa- municipal facilities. Even those facilities ter. Named “Bertha” by the employees, the covered lagoon produces biogas that do digest on-site may still use the that is used directly in the processing municipal treatment system for their plant’s boiler system. As a result, the final wastewater disposal, thus they company has significantly reduced its would not require a discharge permit demand for natural gas, reducing from Ecology. More research is required annual GHG production equivalent to 15,000 tons of CO2. The project to determine the extent of on-site received early development support digestion at industrial facilities and the through an agreement with a company potential it represents as a source for to create and market the GHG reduc- biomethane. tions as carbon credits (Simplot, 2010).

Discussion The assessment found examples of at least four municipal WWTP energy projects in Washington. King County leads the way with energy recovery at two WWTPs (West Point and South). These two facilities with biogas-to-energy projects account for more than half of the estimated biogas production output from major metropolitan facilities. Energy production at the just-completed Brightwater WTTP in north King County is being considered.

Two other projects are at the Budd Inlet WWTP, part of the LOTT wastewater group in Thurston County and the Redondo WWTP in Des Moines (King County). These are smaller electricity generation projects, ranging from 60 kW to 330 kW capacities. They are WWTP biogas projects of a size suitable for some electricity

Biomethane for Transportation: Opportunites for Washington State 17 Table 4. Wastewater Treatment Plants with Biomethane Potential

Biomethane GGE Average Flow County Facility Name Location Potential Potential (MGD) EST cf/d EST GGE/d King County 215 King Seattle 1,290,000 10,320 West Point WWTP (not avg) King County 144 King Renton 864,000 6,912 South WWTP (not avg) Spokane Spokane Spokane 59.6 - 79.8 420,000 3,360 AWWTP Tacoma Central Pierce Tacoma 60.00 360,000 2,880 No. 1 King Cty Bright- Snohomish Woodinville 36.00 216,000 1,728 water WWTP Chambers University Pierce 28.70 172,200 1,378 Creek STP Place Thurston LOTT Olympia 28.00 168,000 1,344 Yakima Yakima POTW Yakima 21.50 129,000 1,032 Salmon Creek Clark Vancouver 14.95 89,700 718 STP Benton Richland POTW Richland 11.40 68,400 547 Kitsap Bremerton STP Bremerton 10.10 60,600 485 Lakota WWTP/ Federal King Lakehaven 10.00 60,000 480 Way Utility Dist. Mt Vernon Mount 7.6 - 15 Skagit 60,000 480 WWTP Vernon (not avg) Grays Harbor Aberdeen STP Aberdeen 9.90 59,400 475 Walla Walla Walla Walla STP Walla Walla 9.60 57,600 461 Midway Sewer 9 King Des Moines 54,000 432 District WWTP (not avg) Salmon Creek WWTP/SW King Burien 8.10 48,600 389 Suburban Sewer Dist.

Table continued on next page

production, but they could not likely satisfy the return on investment required to develop advanced gas cleanup and compression capabilities.

Project Candidates As mentioned, EPA set 5 MGD average flow as the threshold for consideration as a potential energy project. To define pipeline-quality biomethane further, National

18 Biomethane for Transportation: Opportunites for Washington State Table 4. Wastewater Treatment Plants with Biomethane Potential, continued

Biomethane GGE Average Flow County Facility Name Location Potential Potential (MGD) EST cf/d EST GGE/d Ellensburg Kittitas Ellensburg 8.00 48,000 384 POTW Miller Creek Normandy King 7.10 42,600 341 WWTP Park Port Angeles Clallam Port Angeles 6.70 40,200 322 STP Lewis Chehalis STP Chehalis 6.00 36,000 288 Kitsap County - Kitsap Poulsbo 6.00 36,000 288 Central WWTP Redondo WWTP/ King Redondo 5.60 33,600 268.8 Lakehaven Utility Dist. Wenatchee Chelan Wenatchee 5.50 33,000 264 POTW Pierce Puyallup WPCP Puyallup 5.00 30,000 240 Pierce Sumner STP Sumner 4.59 27,540 220.32 Franklin Pasco WWTP Pasco 4.52 27,120 216.96 Port Orchard Port Kitsap 4.20 25,200 201.6 WWTP Orchard Mason Shelton STP Shelton 4.02 24,120 192.96 Burlington Skagit Burlington 3.79 22,740 181.92 WWTP Pierce Fort Lewis Tacoma NA NA Total 4,603,620 36,829

Sources: Current EPA websites, WA Dept. of Ecology data resources, and assorted news articles and reports (Kerstetter, 2001).

Grid, a natural gas utility, sets the threshold at 17 MGD, though this figure will likely change as technology improves (Chahbazpour, 2010).

The assessment shows four additional candidates that fit the 17 MGD threshold: Spokane, Tacoma, Chambers Creek (University Place), and Yakima. The Western Washington Clean Cities Coalition has begun discussions with Tacoma city officials and is currently providing technical assistance to evaluate a potential project. Chambers Creek, also in western Washington, may offer an excellent opportunity following a more in-depth feasibility study.

Biomethane for Transportation: Opportunites for Washington State 19 Map 2. Selected Wastewater Treatment Plants with Biomethane Potential 2 195 Spokane Pullman 90 Colville 12 395 Wastewater Treatment Plants Naural Gas Pipelines 395 2 Pasco Moses Lake 82 97 Wenatchee Sunnyside 97 97 2 Yakima Ellensburg 90 12 14 Mount Vernon Seattle 5 Tacoma Everett Centralia 5 Wastewater Treatment Plants with Biomethane Potential Wastewater Olympia Bellingham 12 Vancouver Bremerton Longview 101 Aberdeen

20 Biomethane for Transportation: Opportunites for Washington State Livestock Producers – Dairies

Livestock operations create a variety of organic wastes that may be suitable for digestion into biogas, but so far manure from dairy and hog operations has been the major focus. In Washington, the dairy industry is a much more significant candidate than other livestock operations.

The EPA estimates that 6,900 farms present a reasonable potential for methane capture or generation. Currently, the EPA AgSTAR program is tracking around 160 existing livestock digester projects in the United States. The vast majority of these projects produce heat and electricity. Two CNG vehicle projects at dairies are currently underway, and more may be in the works. The first is located at the Hilarides Dairy in California’s Central Valley; the second project just kicked off at the Fair Oaks Dairy in west central Indiana. The scene surrounding biomethane project Six digester projects are currently development at the Vanderhaak Dairy in operational in the state: one in eastern Whatcom County. Washington and the rest in Whatcom and Skagit counties in northwest Washington. The Vanderhaak Dairy in Lynden is participating in a pilot biomethane vehicle project in development by Western Washington University with support from Western Washington Clean Cities.

Project Assessment The assessment of dairy biomethane potential is calculated from the gross numbers of dairy cows in each county and using a conservative figure of 30 cubic feet of methane generated per cow per day. This estimate shows more technical then market potential. Many of the smallest dairies will not invest in digestion technology. However, while industry observers may mark the threshold for viability at 500 cows or more, even a 200-cow dairy may benefit from digestion if it cooperates with multiple dairies in a larger project.

This assessment provides guidance about desirable dairy geography and size to help target dairy producers who are more likely to benefit from digestion technology. Table 5 shows the results of the assessment and the potential GGEs generated per day if all of the manure was converted to biomethane.

Discussion Observers of digester developments in the state point to financing, regulations, and markets as key obstacles that need to be addressed to make digesters at dairies more viable. Key factors involved in the viability of anaerobic digestion on dairy farms also include the volume and characteristics of the manure available for digestion

Biomethane for Transportation: Opportunites for Washington State 21 Table 5. Washington State Dairies and Their Biomethane Potential

Number of Dairy Farm Herds Bio- GGE Total methane Potential County 1 to 200 to 500 to 1,000 - 2,500 199 499 999 2,499 or More Cows Output EST Cows Cows Cows Cows Cows EST cf/d GGE/d Yakima 2 9 19 28 9 93,606 2,808,180 22,465 Whatcom 55 38 24 7 1 46,588 1,397,640 11,181 Grant 2 9 4 7 3 29,652 889,560 7,116 Franklin 1 2 2 5 2 19,666 589,980 4,720 Skagit 8 17 6 1 0 12,273 368,190 2,946 Snohomish 13 7 6 2 0 9,575 287,250 2,298 King 14 15 2 0 0 7,926 237,780 1,902 Adams 1 2 0 5 0 7,453 223,590 1,789 Lewis 21 6 2 1 0 6,250 187,500 1,500 Thurston 9 1 2 2 0 4,813 144,390 1,155 Benton 1 1 1 0 1 4,261 127,830 1,023 Clark 3 3 2 0 0 3,346 100,380 803 Grays 7 2 0 1 0 2,476 74,280 594 Harbor Pacific 6 1 1 0 0 1,417 42,510 340 Stevens 8 1 0 0 0 1,050 31,500 252 Pierce 2 0 1 0 0 1,004 30,120 241 Klickitat 1 2 0 0 0 895 26,850 215 Spokane 7 1 0 0 0 816 24,480 196 Clallam, Cowlitz, Island, Jefferson, Kitsap, 14 4 0 0 0 2,532 75,960 608 Kittitas, Lincoln, San Juan, Wahkiakum, Whitman Total 175 121 72 59 16 255,599 7,667,970 61,344 The following counties have no dairy facilities registered with WSDA: Asotin, Chelan, Columbia, Douglas, Ferry, Garfield, Mason, Okanogan, Pend Oreille, Skamania, Walla Walla

22 Biomethane for Transportation: Opportunites for Washington State Map 3. Washington State Dairies, Digesters, and Natural Gas Pipelines Asotin Pullman 2 Spokane Pend Oreille 195 Spokane Garfield 90 Whitman Colville 12 Stevens Columbia 395 Lincoln Walla Walla 395 Ferry Adams 2 Small Dairy (<200 mature cows) Medium Dairy (200-700mature cows) Large Dairy (>700 mature cows) Natural Gas Pipeline Franklin Map Key (Data as of July 2011) : Grant Pasco 82 Moses Lake 97 Benton Douglas Okanogan Wenatchee 97 Chelan Yakima Yakima Kittitas 2 Klickitat Ellensburg 90 Skagit King Snohomish Whatcom Skamania Pierce 12 5 Lewis Clark Seattle Thurston Cowlitz Everett Kitsap Tacoma Washington State Dairies and Natural Gas Pipelines Washington Island 5 Olympia Bellingham 12 San Juan Bremerton Vancouver Mason Longview Pacific Grays Harbor Clallam Wahkiakum 101 Jefferson Aberdeen

Biomethane for Transportation: Opportunites for Washington State 23 and the capacity to co-digest the manure with other agricultural or industrial waste streams (e.g., preconsumer food waste) that have higher relative biogas potential. The EPA and others may point to viability thresholds for 500 to 1,000 milk cow equivalents, but that is only part of the story. Community digesters that bring together multiple farms and multiple feedstocks offer exciting opportunities for energy development. The Rainier digester project under development near Enumclaw in King County is an example of such an opportunity.

Project Candidates Yakima, Grant, Franklin, and Adams counties in eastern Washington are home to the numbers of cows and larger dairies necessary to justify consideration for significant biomethane development. They represent 59 percent of the dairy biomethane potential in the state. Map 3 shows the locations of registered dairy farms and the locations of major utilities and natural gas transmission pipelines (shown as blue lines). Whether for direct vehicle use or for injection into the natural gas pipeline, the proximity of natural gas transmission pipelines to major dairy centers in eastern Washington may offer an alternative market to the low electricity purchase rates offered to project developers by utilities in that area.

In western Washington, Whatcom, Skagit, and Snohomish counties – representing 27 percent of the state’s biomethane potential – offer the most immediate opportunities for digester development. Proximity to major urban centers, interstate highways, and major natural gas pipelines could make biomethane projects attractive for developers.

24 Biomethane for Transportation: Opportunites for Washington State Municipal Solid Waste Organics

Communities throughout Washington have a strong recycling ethic, as demon- strated by the impressive recycling rates reported from Bellingham to Vancouver and from Seattle to Spokane. The organic materials contained in municipal solid waste (MSW) streams are energy-rich materials that offer valuable opportunities to produce renewable power or fuel.

Source-separation and processing have not only been cost effective in comparison to landfilling, but the potential emissions reduction benefits are also important. Based on EPA models, between a quarter to a third of the biogas potential is lost in landfills because of the lag time from when garbage is dumped to when biogas collection systems are operational. During this lag time, decomposition still occurs and the resulting methane – a potent greenhouse gas – is emitted to the atmosphere (U.S. Composting Council, 2009).

Washington communities have a two-decade track record of source- separating yard and garden debris for composting. And as the cost of trans- porting and landfilling garbage increases and concern about greenhouse gases grows, communities continue to look for opportunities to separate more organic Including food scraps in yard debris collection waste from their MSW. For the purposes expands opportunities for capturing bioenergy. of this assessment, the organics portion Source: City of Portland of the solid waste stream is divided into two parts: one that is suitable for biogas production through high-solids anaerobic digestion (i.e., food wastes, yard debris, and soiled paper packaging and products) and another that is suited to thermal gasification (i.e., wood wastes).

High-Solids Anaerobic Digestion One common strategy for diverting more organic materials is allowing the addition of food waste, and sometimes soiled paper packaging, to yard waste containers. The former yard debris cart becomes an all-organics collection cart. In Europe, the materials combined in an organic materials collection bin are often sent to facilities that practice high-solids anaerobic digestion. Composting or fertilizer production still follows the digestion process, but this new stage of processing captures the energy value in the volatile solids of the organic materials and helps control odors. This technology for high-solids anaerobic digestion is now developing in North America.

Biomethane for Transportation: Opportunites for Washington State 25 High-solids anaerobic digestion can happen in a couple ways – wet or dry – depending on what parts of the non-woody organics fraction is collected. Source- separated organics may be ground or processed together with liquid wastes such as wastewater solids or dairy manure for co-digestion. Even as solids levels increase in the mixed feedstock, the process can be considered a form of “wet” digestion as long as these co-digestion materials can be pumped (greater than 70 percent moisture).

Co-digesting food processing wastes, dairy processing liquids, and even fats, oils and grease (FOG) with dairy manure occurs at many wastewater and livestock digester projects in Washington and around the country. In eastern Washington, the Barr-Tech facility outside of Spokane plans to incorporate source-separated food wastes with animal wastes for use in a plug-flow type digester.

The European technologies that are gaining new attention mostly use batch dry digestion methods. Batch methods process the source-separated organics to keep the solids-liquids density at a level that allows operators to stack the material in piles inside airtight containers (greater than 30 percent solids). These moisture levels are higher than would be appropriate for aerobic composting. As leachate forms, it is collected from under the piles and is recirculated to maintain anaerobic conditions. Biogas is produced over a three- to four-week period, after which the digested materials are taken from the digester containers and moved to an aerobic composting process for conversion to soil amendments (Spencer, 2010).

Currently, dry-batch digestion technologies from Bekon, BIOFerm, Gicon, Kompoferm, and Solum are being marketed in the United States. Research at Washington State University, sponsored by the Department of Ecology, is looking for ways to enhance high-solids anaerobic digestion technology.

Project Assessment To assess the biogas potential from the food-yard-paper fraction of MSW, the research team used records maintained annually by the Washington State Department of Ecology on the fate of a wide variety of MSW materials. Ecology tracks whether materials are recycled, diverted or disposed of, and conducts regular waste characterization studies, which separate and weigh different categories of waste at disposal facilities around the state. The most recent all-state solid waste characterization study was done in 2009.

While absolute tonnages may vary somewhat, these reports confirm the concentration of organic MSW materials around metropolitan areas. Table 6 shows the availability of these materials by county. Biomethane potential is calculated based on methane yield of 60 cubic meters per metric ton of mixed municipal organics (Allen, 2011).

Discussion The food-yard-paper fraction of MSW is a relatively new target for anaerobic digestion in the United States. An August 2010 article in the trade magazine

26 Biomethane for Transportation: Opportunites for Washington State BioCycle identified four projects in development using dry, high-solids methods (including two from the Pacific Northwest)(Spencer, 2010): • Cedar Grove Composting, Everett, WA (BIOFerm Energy Systems) – 50,000 tons per year of food-yard-paper materials from Puget Sound area communities. • Fraser-Richmond Soil & Fibre, Richmond, BC (Harvest Power) – 30,000 tons per year of food waste from the Vancouver, BC, area, plus yard trimmings. • Zero Waste Energy Development Company (ZWED), San Jose, CA (Kompoferm) – 50,000 tons per year of mixed organic waste from the City of San Jose and other regional generators, and the organic fraction left after processing recyclables and garbage at the GreenWaste Recovery facility in San Jose. • University of Wisconsin, Oshkosh, WI (BIOFerm Energy Systems)— 6,000 tons per year of food waste from campus, plus yard trimmings from the community.

Project Candidates As described above, at least two facilities are in the preconstruction stage in Washington – the Cedar Grove Composting facility outside Everett (dry style) and the Barr-Tech plant outside Spokane (wet style).

Harvest Power, with offices in Waltham, MA, Seattle, WA, and Richmond, BC, has begun construction of a high-solids anaerobic digestion system in British Columbia. They are actively developing projects in other areas of North America and are watching for opportunities in Washington.

Many Washington communities looking for opportunities to increase diversion of organics from landfills will consider high-solids anaerobic digestion to recover energy prior to composting.

Thermal Gasification Thermal gasification processes produce synthesis gas (syngas), which is composed mostly of hydrogen, carbon monoxide, CO2, water vapor, methane, and trace gases. Syngas can be upgraded to biomethane by converting hydrogen and carbon monoxide through a process called methanation and removing CO2 and other gases.

Thermal gasification uses gasifier technology to break down feedstock that has lower moisture and typically higher fiber. Thermal gasification processes have used feedstocks such as wood chips, woody biomass, crop residues, and even purpose- grown energy crops.

While commercial-scale thermal gasification plants are still being developed, technologies required to clean and upgrade the syngas are commercially available and can recover up to 98 percent of the methane from the syngas (Chahbazpour, 2010).

Biomethane for Transportation: Opportunites for Washington State 27 Table 6. Mixed MSW Organics with Biomethane Potential by County MSW Mixed Biomethane MSW Total GGE Potential County Organics Potential tons EST GGE/d tons EST cf/d King 1,875,519 401,924 2,121,118 16,969 Pierce 785,639 168,362 888,518 7,108 Snohomish 683,655 146,507 773,180 6,185 Spokane 462,677 99,152 523,265 4,186 Clark 424,733 91,020 480,352 3,843 Thurston 245,181 52,542 277,287 2,218 Kitsap 239,769 51,382 271,167 2,169 Yakima 234,564 50,273 265,313 2,123 Whatcom 196,529 42,116 222,264 1,778 Benton 163,058 35,652 188,152 1,505 Skagit 118,000 25,287 133,452 1,068 Cowlitz 101,254 21,699 114,513 916 Grant 84,697 18,151 95,788 766 Island 81,424 17,449 92,086 737 Lewis 74,132 15,886 83,840 671 Franklin 72,783 15,597 82,314 659 Chelan 71,540 15,331 80,908 647 Grays Harbor 71,342 15,289 80,684 645 Clallam 71,021 15,220 80,321 643 Mason 57,846 12,396 65,421 523 Walla Walla 57,788 12,385 65,359 523 Stevens 42,050 9,011 47,556 380 Whitman 41,664 8,929 47,120 377 Okanogan 40,033 8,579 45,275 362 Kittitas 38,951 8,347 44,052 352 Douglas 36,653 7,855 41,453 332 Jefferson 29,542 6,331 33,411 267 Asotin 21,420 4,590 24,225 194 Pacific 21,271 4,558 24,056 192 Klickitat 20,377 4,367 23,045 184 Adams 17,285 3,704 19,548 156 San Juan 15,294 3,278 17,297 138 Pend Oreille 12,859 2,756 14,543 116 Skamania 10,794 2,313 12,207 98 Lincoln 10,344 2,217 11,699 94 Ferry 7,353 1,576 8,316 67 Wahkaikum 4,133 886 4,674 37 Columbia 3,990 855 4,512 36 Garfield 2,060 441 2,327 19 Total 7,410,621 59,285

28 Biomethane for Transportation: Opportunites for Washington State This assessment provides a look at the woody fraction of MSW in Washington by county. Though commercial development may be some years away, the data is provided to give as broad a look at biomethane potential as possible. Table 7 shows the availability of woody MSW and agricultural field residues by county. It does not show availability of forest residuals or mill residues, which represent another significant resource that may be available for energy development. The University of Washington, under contract with the Washington State Department of Natural Resources, is currently calculating the volumes of forest harvest residues generated on all public and private timberlands in the state. That report is expected toward the end of 2011.

Biomethane for Transportation: Opportunites for Washington State 29 Table 7. Selected Feedstocks for Thermal Gasification by County Total Thermal MSW Total MSW Mixed AG Field Residue County Gas Feedstocks tons Woody tons tons tons Adams 17,285 1,156 195,508 196,664 Asotin 21,420 1,433 7,034 8,467 Benton 163,058 10,909 113,986 124,895 Chelan 71,540 4,786 0 4,786 Clallam 71,021 4,751 0 4,751 Clark 424,733 28,415 0 28,415 Columbia 3,990 267 109,047 109,314 Cowlitz 101,254 6,774 0 6,774 Douglas 36,653 2,452 74,358 76,810 Ferry 7,353 492 0 492 Franklin 72,783 4,869 119,113 123,982 Garfield 2,060 138 61,592 61,730 Grant 84,697 5,666 268,297 273,963 Grays Harbor 71,342 4,773 0 4,773 Island 81,424 5,447 0 5,447 Jefferson 29,542 1,976 0 1,976 King 1,875,519 125,472 0 125,472 Kitsap 239,769 16,041 0 16,041 Kittitas 38,951 2,606 0 2,606 Klickitat 20,377 1,363 9,682 11,045 Lewis 74,132 4,959 0 4,959 Lincoln 10,344 692 229,962 230,654 Mason 57,846 3,870 0 3,870 Okanogan 40,033 2,678 4,305 6,983 Pacific 21,271 1,423 0 1,423 Pend Oreille 12,859 860 0 860 Pierce 785,639 52,559 0 52,559 San Juan 15,294 1,023 0 1,023 Skagit 118,000 7,894 0 7,894 Skamania 10,794 722 0 722 Snohomish 683,655 45,737 0 45,737 Spokane 462,677 30,953 169,101 200,054 Stevens 42,050 2,813 5,208 8,021 Thurston 245,181 16,403 0 16,403 Wahkaikum 4,133 276 0 276 Walla Walla 57,788 3,866 270,175 274,041 Whatcom 196,529 13,148 0 13,148 Whitman 41,664 2,787 636,150 638,937 Yakima 234,564 15,692 63,527 79,219 Grand Total: 6,549,224 438,143 2,337,045 2,775,188

30 Biomethane for Transportation: Opportunites for Washington State Chapter 2: End Uses for Biomethane

At least three major end uses or market opportunities are discussed in this assessment. These include: • Heat and power production, • Biomethane use as transportation fuel, and • Distribution into the interstate pipeline system.

This last use would allow source providers to market their gas as “renewable natural gas” to buyers who are willing to pay premiums for the environmental attributes of biomethane. The dominant actors in this market currently are California utilities and refineries that want to increase their production of renewable power or low-carbon fuel to meet government mandates.

The market for natural gas has changed dramatically in recent years with the discovery of new, more economically viable methods of recovering natural gas from shale deposits around the United States. The Henry Hub spot price of natural gas has dropped significantly from a summer 2008 peak over $12/MBTU to between $2.50 to $5.00/MBTU throughout most of the past three years (EIA, 2011). As a result, a critical factor in all the end uses of biomethane is the value the market gives to the environmental and renewable attributes of the gas. The value of clean, renewable biomethane in displacing high-cost petroleum fuels has appeal for businesses and government agencies that are looking to improve their economic and environmental balance sheets. This value can be pushed further by government policies that require adaptation to more renewable power or low-carbon fuels. For more on this topic, see Chapter 5.

The ultimate end use of the biogas from a landfill or digester has a major impact on the extent to which the biogas must be upgraded or treated. Figure 5 shows shows how different end uses can fit along a line of increasing levels of gas clean up.

Boilers and combined heat and power (CHP) generators can use gas with lower BTU values (meaning more CO2). The primary step for purifying biogas after removing water vapor is desulfurization, which is reducing the level of hydrogen sulfide to less than 1,000 parts per million (ppm). The next step is gas treatment to remove sulfides, CO2, siloxanes, and any other contaminant gases.

For use in fuel cells, the next step is reforming the biomethane into hydrogen. For transportation- or pipeline-grade fuel, biomethane must be compressed after gas treatment and put in pressure tanks or pipelines for distribution.

As technology evolves, new end uses will be discovered. For example, advances are being made in fuel cells beyond power production. Fuel cell/battery hybrid buses and short-haul trucks are nearing commercial scale.

Biomethane for Transportation: Opportunites for Washington State 31 Heat and Power Production In Washington state and elsewhere, the first entry into renewable energy production for operators of landfills, wastewater treatment plants (WWTPs), and agricultural digesters has been heat and power production. Some projects, especially smaller projects, simply use the biogas as a direct substitute for propane or natural gas in boilers to produce process heat for digesters or other equipment.

For larger facilities, CHP production or stand-alone electricity generation has emerged as a dominant use. The market for renewable power has improved in some areas of the state, where utilities are offering upwards of 8 to 10 cents per kilowatt hour (kWh) produced. However, issues such as interconnection requirements and costs, power purchase agreements, price of power sold, and occasional utility resistance to distributed energy continues to restrict more widespread development of CHP technology in general.

The technology for biogas-to-power systems is steadily improving. For example, Stirling engine CHP systems that can handle biogas that has not been purified are now available. In addition, a number of commercial power generation systems have been developed to handle biogas, even at very low BTU levels. These technology improvements are expanding the range of viable biogas opportunities. The wastewater treatment facility in Helena, MT, has installed two Stirling engine systems and Lakehaven Sewer District in Washington is in the process of installing a system at Redondo Beach.

32 Biomethane for Transportation: Opportunites for Washington State Figure 5. Biogas Upgrading and End Use Pathways 4 100% CH RLNG Liquify 2 Liquid (RLNG) Vehicles 2 Renewable Natural Gas CO Trace and N Remove 4 Fuel 4 (RINs) 95-98% CH Renewable 95-98% CH RCNG Vehicles 2 Compress PIPELINE Natural Gas Power (RECs) End Use Efficiency Varies Renewable (RCNG) Tube Trucks 4 Natural Gas Compressor Removing CO 90% CH Renewable Compressed RCNG Natural Gas Pipeline Distribution Compress Vehicles Natural Gas Grid Trace Gases Electric Remove Figure X9. Clean Biogas Making Biomethane (80% CHP (20% Boiler or Power Efficiency) (60-75% Efficiency) Efficiency) Process Heat S 2 H Tank

Removal

Removal Moisture Biogas Landfill Dairy Livestock Waste Water Treatment Plant Woody Agric. Residue MSW Organics

Biomethane for Transportation: Opportunites for Washington State 33 WWTP CHP Projects in Washington

Here are descriptions of existing biogas-to-energy projects published in a report by the Northwest Clean Energy Application Center

Wastewater Treatment Facility, Renton – A 1.5 megawatt (MWc) molten carbonate fuel cell is located at the South Treatment Plant in Renton. It was the original commercial-scale demonstration project for FuelCell Energy. The demonstration period ended in September 2006 and the system is now mothballed, but it could be brought back online with new fuel cell stacks (the technology has significantly progressed), a new interconnection agreement with Puget Sound Energy (PSE), and probably a new revenue stream of hydrogen gas (an add-on system). The project benefitted from a series of lessons learned, upgrades such as scrubbing the biogas, and adjustments. Currently, the plant cleans its biogas using a pressurized water- scrubbing technology and delivers the cleaned biomethane into a natural gas distribution pipeline under a contract with PSE.

West Point Treatment Plant, Seattle – This CHP facility, operational since 1985, is rebuilding and enlarging existing CHP operations (2.4 MWc to 4.6 MWc). Digester gas is also used to run influent pumps (1.6 MW). The rebuilt system will have two reciprocating engines of 2.3 MW each, plus the 1.6 MW, for a total system capacity of 6.2 MW. Average operations will be at the 3.9 MWa level with peak operation when necessary. West Point shows the value of reinvesting in new systems as technology improves.

Brightwater Wastewater Treatment Facility, Woodinville – A new WWTP began operation in 2011 and will continue to ramp up in 2012. Brightwater uses membrane bioreactor technology for final treatment of the liquid effluent. Wastewa- ter solids are digested anaerobically. Plant size will start at 36 million gallons per day (MGD) with room for expansion. Biogas will be produced that could generate about 1 MW of electricity. A feasibility study on using Brightwater as a test bed facility for CHP applications was conducted by King County in cooperation with the Northwest Energy Technology Collaborative. Snohomish PUD has agreed to fund the test bed.

Budd Inlet Treatment Plant, Olympia – This is a 330 kWc biogas CHP and district energy project at the LOTT Alliance wastewater treatment facility that came online in November 2009. It received an energy conservation grant of $1.7 million from PSE. Total project cost was $2.4 million, including a district heating loop. The biogas powers a GE Jenbacher JMS 208 engine. The project development team included TRANE, Cascade Power and Smith Power Products.

Redondo Wastewater Treatment Plant, Des Moines – This 60 kWc Stirling engine CHP system is a collaborative project between Lakehaven Utility District and PSE. The project’s two Stirling Flexgen engines use digester gas from the plant’s Continued on next page...

34 Biomethane for Transportation: Opportunites for Washington State WWTP CHP Projects in Washington Continued solids handling system (approximately 50,000 cubic feet per day). When complete, it will allow the district to offset approximately 20 percent of the plant’s daily electrical requirement. Thermal energy will be used to reduce natural gas as a heating source for the plant. This project will be the first in Washington to use this state-of-the-art technology.

More information is available from the Northwest Clean Energy Application Center: www.chpcenternw.org.

Transportation Fuel

Natural gas is not yet a major fuel for transportation, but the use of compressed natural gas (CNG) or liquefied natural gas (LNG) is a key step toward the goal of using biomethane in place of natural gas in transportation.

Since the first attempts to increase the use of natural gas vehicles during the 1980s, the market for natural gas vehicles has shifted up and down with changes in the natural gas markets. Attention has focused primarily on “captive fleets,” that is, fleets of vehicles that operate in a localized area and return to the same home base each day. Fleets in urban areas with higher fuel usage per vehicle mile have had the most success (CNGVA, 2010). Examples of such fleets include taxis, school and municipal buses, and refuse/recycling trucks.

One potential advantage of direct use of biomethane over pipeline injection is that natural gas vehicles can tolerate somewhat higher levels of CO2, which can have a significant impact on gas cleanup costs. For injection into the pipeline, the biogas must be purified to about 98-99 percent methane. For direct use as a vehicle fuel, biogas may be cleaned to around 90 percent methane. For example, the California Air Resources Board (CARB) established the following natural gas fuel specification(Rutledge, 2005):

• Methane: 88 percent minimum • Ethane: 6 percent maximum • Propane: 3 percent maximum • Oxygen: 1 percent maximum

• Inert gases (CO2 + N2): 1.5 - 4.5 percent • Total sulfur: 16 ppm • Dewpoint: ≥10°F below 99 percent applicable local winter design temperature

Biomethane for Transportation: Opportunites for Washington State 35 Fleets are Key The Clean Vehicle Education Foundation describes the use of natural gas vehicles in public and private fleets using these relative numbers(Yborra, 2011):

• Transit buses: 11,000 (one of every five on order) • Refuse trucks: 5,000 • School buses: 3,600 to 3,800 • Medium-duty vehicles (shuttles, vans and other work trucks): 20,000+ • Light-duty vehicles (public and private fleets): 25,000 to 30,000 and growing

When converting a fleet to natural gas, the relative benefits and costs must be considered. The benefits start with a major advantage in fuel cost savings. The cost of wholesale CNG can be as low as $1.00 per gasoline gallon equivalent (GGE). Even at retail, the cost of CNG is currently $1.79 per GGE, which is significantly less than the price of the alternative. These savings add up fast for fleet vehicles that may only get 4 to 10 miles per gallon (mpg). CNG from biomethane can be a competitive choice compared to diesel costs.

Other issues to consider are if the fleet owner is installing compression and storage equipment from the pipeline connection and the price premium for new natural gas vehicles versus existing vehicle conversions. If fleet owners accept that conversion to natural gas makes economic sense, then the next step is to convince them of the superiority of CNG made from biomethane. In the current market, this argument has to be based on the value of societal or environmental attributes, which clearly motivate some companies.

The “Green-Clean” Factor In western Washington, refuse and recycling hauling fleets have joined the Pierce County transit system as successful users of CNG for their vehicles. These fleets meet two important criteria: their vehicles have low mileage ratings (meaning they use a lot of fuel) and they return to the same fleet base each day. Their conversion to CNG was pushed along by two “green” factors:

1. The cities of Seattle and Issaquah, for example, required refuse and recycling haulers to reduce the carbon intensity of their collection systems as a factor in winning new contracts with the city. For Waste Management and CleanScapes (the winning bidders), that meant switching from diesel to CNG. 2. A change in air pollution regulations affected diesel vehicles, especially heavy-duty vehicles.

Fuel cost savings and these green factors influenced these companies to commit in big ways to convert their heavy-duty collection vehicles to CNG. They are increasingly converting other parts of their fleets to CNG, too. This has, in turn, influenced other haulers, such as Allied Waste, to look into CNG conversion to stay competitive.

36 Biomethane for Transportation: Opportunites for Washington State Waste Management, with support from the Western Washington Clean Cities Coalition and Saybr Contractors, went the extra step of establishing a public fast-fill station next to their fleet facility in south Seattle. Saybr has worked on many of the CNG fueling stations in the area, including the construction of the public fast-fill fuel station near SeaTac Airport for the Port of Seattle and Clean Energy Fuels Corporation.

The Port of Seattle’s SeaTac Airport is another example of where incorporating value for environmental benefits supports the expansion of CNG use in transportation. Taxi cabs that serve the airport are increasingly lower-carbon, lower-emission vehicles, such as hybrid and natural gas cars. The addition of natural gas vehicles in such a visible location and the nearby refueling infrastructure support use by other fleets and the public.

Identifying and monetizing the value attached to green factors will further move the market beyond conversion to natural gas to the eventual use of more biomethane.

Direct Use Simplifies Distribution As a company, Waste Management also has experience using biomethane in vehicles. Their first project used LNG from a landfill gas project in California. The fact that their trucks return regularly to the source of the gas points to the main advantage of the direct use of biomethane for transportation. It eliminates the distribution challenge of getting the gas from the source to the end user. The alternatives – trucking CNG in dedicated cylinders to an end user or injecting biomethane into the pipeline grid – both involve significant costs that can threaten a project’s viability.

Waste Management and CleanScapes have contracts for waste collection services around the region and throughout the state. With in-house experience managing CNG fleets and the ability to take advantage of the green factor, they could be a major partner for future biomethane projects.

Marine Vessels and State Ferries In addition to road vehicles, large marine vessels are another potential target for use of natural gas and biomethane, in particular LNG and bio-LNG. An important driver in the consideration of LNG for ships was the creation in 2010 by the International Maritime Organization, an agency of the United Nations, of the North America Emissions Control Area (ECA). The control area was created for the purpose of reducing sulfur dioxide (SO2) and nitrous oxide (NOX) pollution from burning diesel.

Though the State ferries already use ultra-low-sulfur diesel, other large marine vessels that historically use bunker fuel will be challenged to meet the new restrictions, which become enforceable in 2012. To meet the new air quality requirements, and, in the case of the State ferries, to save significant costs on fuel, LNG is in serious consideration as an alternative fuel.

Biomethane for Transportation: Opportunites for Washington State 37 The Washington Legislature’s Joint Committee on Transportation is sponsoring a consultant study on the costs and benefits of a switch to LNG. In early feedback WSDOT estimates that the ferry system could save nearly $300 million in fuel costs, with a net present Dairy Biomethane value (at 5 percent) of $75.9 million, Direct Use Projects measured against estimated upfront costs of $65 million to retrofit six Hilarides Dairy Issaquah class vessels. Though Norway Rob Hilarides produces milk on a large has extensive experience with LNG to dairy near Lindsay, in California’s Central fuel ships, this would be the first use Valley. In 2005, Hilarides installed his of LNG on vessels in the United States first energy project – a covered digester on the manure lagoon serving his (Moseley, 2011). 6,000-head heifer ranch. That digester produced enough gas to feed four 125 Pipeline Distribution kW generators to make power for the local utility. Hilarides saw the success of Biomethane and value of his investments, which lead One of the challenges of biomethane him in 2008 to add digestion capacity use for transportation is getting the gas at his main dairy, which had 9,000 head to end users. Direct use at or near the and sat next to the heifer ranch. He added two more generators, reaching source is the most economical and may the maximum permitted under Cali- represent the most value if the producer fornia regulations. This left a surplus of can make use of all the biogas. When biogas, leading Hilarides to explore its that is not possible, the alternative is use as a transportation fuel. to clean the gas and deliver it to the Hilarides owns and operates his own network of natural gas distribution fleet of tanker trucks to deliver fluid pipelines across Washington and milk to the nearby processing plant in around the country. Hilmar. To build his biomethane project, Hilarides partnered with inter- The natural gas pipeline system ested public and private organizations, including dairy, environmental, and is comprised of large interstate technical interests. Together they won transmission lines and smaller, more a $600,000 grant to demonstrate the numerous intrastate distribution use of biomethane in his farm’s trucking lines. At costs that can exceed a fleet. The project was operating in time million dollars per mile to bury for the 2009 World Dairy Expo kick-off in Tulare. new gas pipeline, this option works primarily for producers who are very The project cost about $1.6 million to close to a pipeline that can accept the install. It combines a SulfaTreat (iron biomethane into the larger transmission sponge) process to remove hydrogen lines. sulfide, followed by pressure-swing ad- sorbtion technology to scrub the CO2. It has a fast-fill pump on site to fill the four Pipeline Gas Standards converted milk trucks and a small fleet While no single standard for natural gas of pickup trucks. At full capacity, the or biomethane quality exists, we can facility is designed to offset 650 to 800 gallons per day of diesel and gasoline use guidance from Europe, which has (McDonald, 2011). more facilities producing biomethane

38 Biomethane for Transportation: Opportunites for Washington State for pipeline injection and vehicle use. In the United States, Pacific Gas & Electric (PG&E) and Southern California Gas (SoCalGas, a Sempra company), both major gas utilities based in California, have published standards in Dairy Biomethane response to interest and development Direct Use Projects of biomethane projects in their service Continued territories. Key default requirements are Fair Oaks Dairy summarized in Table 8. In mid-2011, a second major dairy signed contracts to embark on their Renewable Attributes own biomethane to transportation project. With multiple farms and more than Simply selling upgraded biomethane as 10,000 cows, the Fair Oaks Farms dairy natural gas would not be economical group in Fair Oaks, Indiana, is a major given the low value for natural gas producer of milk, which they market to in today’s market. Its real value is as processing facilities in three Midwestern renewable gas. Once the biomethane states. The dairies are located near the Fair Oaks interchange off Interstate 65, is in the transmission lines, a producer about 70 miles south of Chicago. should be able to sell it in much the same way that a renewable electricity The dairy group partnered with Clean provider sells renewable power – the gas Energy, a leading CNG supplier. The first commodity should be valued separately step involved establishing a connection to the natural gas pipeline and creating from the renewable attributes of the private and public CNG fueling facilities. biomethane in separate transactions. The group then partnered with Paccar The different values of the biomethane Leasing to lease the 42 Kenworth natu- might be sold to the utility that accepts ral gas trucks needed to move milk. The it into the pipeline or to any end user fleet is projected to use upwards of 1.5 million diesel gallon equivalents (DGE) in exchange for a transit or wheeling of natural gas per year. charge from the gas utility. With strict, accurate metering and recordkeeping, Soon they will build the facilities to it may be possible to sell the renewable clean the biogas from one of the dairy’s attributes separately. This type of multiple anaerobic digesters to use in their fueling facilities. The dairy is market transaction may allow entities motivated by the desire to save money, in other locations to take credit for the make money, and produce milk with the renewable gas in order to meet state or lowest possible carbon footprint, which federal mandates for renewable energy. has become a demand of milk product buyers like Walmart. Marketing renewable attributes from biomethane is not as well developed as the market that operates for renewable energy credits (RECs) in the power sector. The major gas utilities in California – PG&E and SoCal Gas – have extensive experience making these transactions successful.

In states where the biomethane is used to produce electricity, the appropriate

Biomethane for Transportation: Opportunites for Washington State 39 Table 8. Biomethane Gas Quality Specifications from California Utilities

Gas Quality PG&E SoCalGas

CO2 ≤ 1 percent ≤ 3 percent Oxygen ≤ 0.1 percent ≤ 0.2 percent Hydrogen sulfide ≤ 0.25 grains/100 scf ≤ 0.25 grains/100 scf Mercaptan sulfur ≤ 0.5 grains/100 scf ≤ 0.3 grains/100 scf Total sulfur ≤ 1 grain/100 scf ≤ 0.75 grains/100 scf Water/moisture ≤ 7 lbs/million scf ≤ 7 lbs/million scf Total inerts No requirement ≤ 4 percent Heating value Specific to receipt point 970-1150 BTU/scf Landfill gas Not allowed No requirement Temperature 60 – 100°F 50 – 105°F Gas interchangeability Per AGA Bulletin 36a Per AGA Bulletin 36a Wobbe number Specific to receipt point Specific to receipt point Lifting Index Specific to receipt point Specific to receipt point Flashback index Specific to receipt point Specific to receipt point

a American Gas Association, Research Bulletin 36, Interchangeability of Other Fuel Gases with Natural Gases. Source: Rutledge, 2005

mechanism may be the creation of RECs or other certificates required to meet Renewable Portfolio Standards (RPS). This is a possibility in Washington and California, but there remains a question in California if renewable gas from out of state will get the same credit value as in-state renewable gas.

40 Biomethane for Transportation: Opportunites for Washington State Washington Biomethane Pipeline Projects

Cedar Hills Landfill In 2009, Bio Energy Washington, a subsidiary of Virginia-based Ingenco, began operating one of the largest landfill gas processing facilities in the U.S. at the Cedar Hills Landfill in King County. Employing 12 staff, the project cleans landfill gas using a membrane filter technology supplied by Air Liquide. Within a year, the facility reached about 80 percent of its rated capacity.

From the landfill, the gas is injected into a natural gas distribution pipeline and sold to Puget Sound Energy. Because of the gas cleaning system used at the landfill, the biomethane is actually cleaner than natural gas coming from conventional wells.

Once in the pipeline, PSE uses this gas to produce electricity at one of its nearby natural gas generating stations. According to PSE, the power produced is equivalent to a 35 MW natural gas power plant – enough to power 24,000 homes. They also estimate that the renewable attributes of the biomethane will reduce the utility’s carbon footprint for that power by two-thirds. Because renewable energy credits from the project may be generated and sold, PSE and the county have agreed to share in any proceeds.

South Treatment Plant King County’s South Treatment Plant in Renton is one of three in the county and one of the largest in the state. This plant has been purifying its digester gas for decades using a highly effective water scrubbing technique. Much of the digester gas is used internally as fuel to meet thermal or power needs of the facility.

The plant participated in a commercial-scale demonstration of a molten carbonate fuel cell, producing 1.5 MW of power. The demonstration period ended in 2006. Now mothballed, the fuel cell system could be brought back on line with new fuel cell stacks (the technology has significantly progressed), a new interconnection agreement with PSE and probably a new revenue stream of hydrogen gas (an add-on system). The Northwest Clean Energy Center produced a case study on the project.

For several years, the plant has delivered excess biomethane via pipeline under an agreement with PSE. But because of the age of the project, PSE cannot use this source for compliance with the Renewable Portfolio Standard established under Washington Initiative 937.

The PSE agreement is currently up for renewal, so King County officials are reviewing additional opportunities for this biomethane. They may use more of it internally to reduce operation costs or sell it through the pipeline to California fuel providers impacted by the state’s low-carbon fuel standard (LCFS). A key factor is if time limits affect renewable status of the gas under the California LCFS. Officials are also considering local transportation uses, but they do not have sufficient vehicles on site to use all the biomethane, their long-haul biosolids trucks could not make their round trips using low-energy-density CNG, and capital expenditures for CNG or LNG infrastructure and vehicle conversions for their use or public use would be challenging. A decision is expected in late 2011 (Hensman, 2011).

Biomethane for Transportation: Opportunites for Washington State 41 Chapter 3: Converting Biomethane for Transportation Fuel

After biogas is produced and collected from a landfill or digester, three major steps are required before it can be used as a fuel for transportation: • First, the unwanted gases and moisture must be removed. This process converts the biogas into biomethane, or renewable natural gas. • Second, the cleaned gas must be pressurized into compressed or liquefied gas (CNG or LNG) to be used by vehicles. • Finally, the gas has to get from the source to an end user, so the third step involves distributing the gas or arranging for its delivery or pick up for use in vehicles.

Cleaning/Upgrading Biogas Facility operators have many options for cleaning biogas into biomethane. The list goes by many names and, of course, by many brand names used by equipment suppliers to set apart their specific combination of technology. The basic gas cleaning steps include: • Water vapor removal

• Hydrogen sulfide (H2S) removal

• Carbon dioxide (CO2) removal • Siloxane and trace gas removal

For a research project about the pros and cons of different biogas treatment technologies, Washington State University (WSU) scientists evaluated various methods available to produce biomethane at facilities in the state. They also developed and tested adsorption tower technology for possible use in farm digester projects. Among the sources that the WSU researchers reviewed was a Dutch study of biogas cleanup technologies used in Europe and the costs of installing and operating biogas cleanup systems. In addition, a major study entitled, “State of Science on Biogas,” by the Water Environment Research Foundation (WERF), looked at the treatment and utilization of biogas and provided an in-depth analysis of the available technologies for cleaning biogas for high-energy-value uses. Details of these three technology studies are summarized in Figures 6 through 12.

42 Biomethane for Transportation: Opportunites for Washington State Figure 6. Biomethane Upgrading Technology: Water Scrubbing

Water scrubbing is a well-proven technology. Because CO2 and H2S are more soluble in water than CH4, they are relatively easy to separate in this physical process. Typically, pressurized gas is fed into the bottom of the scrubber while water is fed on top. The water exits with the CO2 and H2S, while moisture-laden methane exits the top. The CO2 and H2S are stripped as exhaust gases from the water, which is often used again. Fresh water may be used if readily available.

Advantages: • Mature technology • Reliable and simple to maintain • No special chemicals required

• Achieves removal of both CO2 and H2S • Good methane content at outlet (>97 percent) • Low cost to operate and maintain

Disadvantages: • Requires a lot of water even with regeneration • High-quality water required

• Corrosion problems due to H2S

• Limitation of H2S removal because the CO2 decreases pH of the solution

Biomethane for Transportation: Opportunites for Washington State 43 Figure 7. Biomethane Upgrading Technology: Physical Scrubbing

Physical scrubbing with polyethylene glycol is similar to water scrubbing.

CO2 and H2S are more soluble than methane in this solvent. Because they are more soluble in this solution than water, this method has the advantage of less pumping and reduced demand for solvent. Selexol is one of the trade names for this method, which always involves regeneration and recirculation of the solvent.

Advantages: • Biomethane does not require further drying • Higher absorption rate than water (smaller columns)

Disadvantages:

• Solvent regeneration is complex if H2S is not removed first • Solvent is expensive and difficult to handle

44 Biomethane for Transportation: Opportunites for Washington State Figure 8. Biomethane Upgrading Technology: Chemical Scrubbing/Chemical Absorption

Chemical absorption also uses an absorption column through which biogas is pumped. In this method, reversible chemical bonds are formed between the solute and the solvent. The exhaust gases are released when the solvent is regenerated. When amines are used as the solvent, the regeneration is done with heat.

Advantages: • Operates at atmospheric pressure • High efficiency and reaction rate for higher absorption rate than water (smaller columns)

• Complete H2S removal

Disadvantages: • Solvent is difficult to handle • Amine breakdown requires significant heat to regenerate • Corrosion problems • Additional chemical input • Wasted chemicals may require treatment • Historically used only in larger facilities

Biomethane for Transportation: Opportunites for Washington State 45 Figure 9. Biomethane Upgrading Technology: Pressure Swing Adsorption

This method uses variations in pressures to separate gases based on their molecular characteristics and affinity for an absorbent material. Under pressure, gases tend to be attracted to solid surfaces, or adsorbed. Higher pressures result in more adsorption. Special adsorptive materials (e.g., zeolites and active carbon) are used as a molecular sieve, preferentially adsorbing the target gas species at high pressure. When the process swings to low pressure, the gases are desorbed from the adsorbent material.

Advantages: • Suitable for smaller flows • No heat or chemicals required • Low power demand • Low cost to operate and maintain • Low emission • Allows removal of nitrogen and oxygen

Disadvantages: • High capital cost (affected by number of columns of the PSA unit • Lower methane content at output (<97 percent)

• Incomplete scrubbing (an additional H2S removal step needed first and other treatment required afterwards)

46 Biomethane for Transportation: Opportunites for Washington State Figure 10. Biomethane Upgrading Technology: Cryogenic Separation

Cryogenic separation is based on the principle that different gases liquefy at different temperature-pressure domains. This method demands significant energy inputs to operate at very low temperatures and at high pressures.

Advantages: • Achieves large quantities of high purity biomethane (>99 percent)

• Produces CO2 in marketable form • Better technology for producing LNG

Disadvantages: • High capital costs • Uses lots of process equipment, mainly compressors, turbines and heat exchangers • Requires low temps and high pressures • Higher operating and maintenance costs

Biomethane for Transportation: Opportunites for Washington State 47 Figure 11. Biomethane Upgrading Technology: Membrane Systems

Membrane systems work on the principle that some gases can penetrate a thin membrane while others cannot. The permeability is a direct function of the chemical solubility of the target component. Hollow fiber modules are used to give a large membrane surface per volume, making the unit very compact. Operating pressures are typically in the range of 25 to 40 bar.

Advantages: • Compact, easy to use • Fast start up • Light in weight • Low energy required • Low maintenance

Disadvantages: • Often yields lower methane concentration though high purity is possible (between 95-99 percent) • Renewal of high-cost membrane required

• Must remove H2S prior to treatment

48 Biomethane for Transportation: Opportunites for Washington State Figure 12. Biomethane Upgrading Technology: Biological Filters

Bio-filters that use a variety of media to support populations of select micro- organisms are increasingly used to clean many types of gases. They are widely used to remove H2S. Further development to use them for removing other components of biogas show promise.

Advantages: • Low energy requirement, mild conditions and byproducts (e.g., elemental sulfur)

Disadvantages: • Additional nutrients are required for bacterial growth

• Small amount of O2 and N2 left in treated biogas

• The H2S removal efficiency depends on the activity of bacteria

Sources: WSU (Zhao, et al., 2010); Dutch study (de Hullu, et al., 2008); WERF (Arespacochaga, 2010)

Biomethane for Transportation: Opportunites for Washington State 49 A study of biogas upgrading technologies worldwide provides a comparison of effectiveness for selected parameters, as shown in Table 9.

Table 9. Effectiveness of Different Gas Cleanup Technologies Pressure Swing Organic Physical Chemical Parameter Water Scrubbing Adsorption Scrubbing Scrubbing Pre-cleaning Yes No No Yes neededa Working pressure 4-7 4-7 4-7 No pressure (bar) Methane lossb <3% / 6-10% f <1% / <2% g 2-4% <0.1% Methane content >96% >97% >96% >99% in upgraded gasc Electricity consumptiond 0.25 <0.25 0.24-0.33 <0.15 (kWh/Nm3) Heat requirement No No 55-80 160 (OC) Controllability compared to +/- 10-15% 50-100% 10-100% 50-100% nominal load Referencese >20 >20 2 3

a 3 Refers to raw biogas with less than 500 mg/m of H2S. For higher concentrations, pre- cleaning is recommended. b The methane loss is dependent on operating conditions. The figures given here refer to figures guaranteed by the manufacturer or provided by operators. c The quality of the biomethane is a function of operational parameters. Figures given refer to those guaranteed by the manufacturer or provided by operators, based on air- free biogas. d Given in kWh/Nm3 of raw biogas, compressed to 7 bar. e Number of references reviewed. Some are pilot plants. f <3% CarboTech / 6-10% questAir g <1% malmberg / <2% Flotech Source: Urban, et al., 2008, as quoted in Petersson, et al., 2009

Relative Costs The Dutch study described above investigated the capital and operating costs of biogas cleanup technologies. Though based on European project technology and expressed initially in euros, the cost comparisons they developed provide a helpful look at the relative costs of these technologies, as shown in Table 10.

50 Biomethane for Transportation: Opportunites for Washington State Table 10. Economics of Different Cleanup Technologies

Biomethane Economics Technology Euros/ Nm3 biogas US$/1000 scf biogas Membrane 0.12 4.47 Water scrubbing 0.13 4.74 Chemical absorption 0.17 6.32 Pressure swing adsorption 0.25 9.21 Bio-filter NA NA Cryogenic separation 0.44 16.32

Source: de Hullu, et al., 2008

Conclusions The findings of the WSU evaluation of biogas-cleaning technologies suggests the following: For small-scale anaerobic digesters, if the upgraded biogas is used for electricity generation, the membrane method is preferred because of its lower cost. If the biogas needs to be upgraded to natural gas quality, chemical absorption is selected. For large-scale biogas purification, the combination of water scrubbing and biological method is preferred for the sulfur recovery and low environmental impacts.

A review of the use of gas cleaning technologies in Europe, where the practice is more mature commercially, suggests that market competition among technologies and companies is more open and fluid. A survey of 120 gas upgrading facilities in 13 countries across Europe, Asia, and the United States compared technologies currently in use by plant size, different sources of biogas, and intended end use. No particular pattern in selection could be found and no one type of technology is dominant among these projects, not according to plant size, nor the source of the biogas, nor the intended end use. This survey suggests this is a wide open market. Many of the European equipment suppliers have started marketing their systems to operators in the United States (Petersson, et al., 2009).

Biomethane for Transportation: Opportunites for Washington State 51 Compressing Biomethane

The second major component of preparing biomethane for use as transportation fuel involves compressing the processed biomethane into the equivalent of CNG or LNG. This makes the biomethane usable by existing or converted natural gas vehicles. The decision to develop CNG or LNG capacity is driven by market opportunities and economies of scale.

Compressed Natural Gas CNG is pressurized in storage tanks to a standard of 3,000 to 3,600 pounds per square inch (psi). The cylinders were historically made of steel, but are now made of many different materials. Recently, cylinders have been made of metal liners wrapped with composite fiber material to reduce weight while increasing strength.

Compressing gas to CNG standards is less costly than compressing LNG, which is higher density. However, because of its lower energy density relative to LNG, diesel, or gasoline, cars and trucks that use CNG have a reduced range. The availability of refueling stations is limited, so fleet owners are less assured of their ability to refuel for a return trip. This fact favors its use in short-haul vehicles or fleets that return to a home base each day for refueling.

The CNG cylinders are located in different places in different vehicles; they may be in the trunks of cars, on the frame of trucks, or on the roofs of buses. Refueling is done in one of two ways: on a time-fill or fast-fill basis. Time-fill fueling occurs through gradual pressurization. It is lower in cost, but can take several hours to fill a vehicle. This is not a problem for fleets with vehicles that park overnight. The fast-fill option is more expensive and uses more energy to run compressor pumps. It also requires a high-pressure storage system of sufficient size to assure that demands on the system can be supplied at the fast-fill speed.

Liquified Natural Gas Natural gas is liquefied to achieve very high energy densities; that is, Alternative Vehicle more energy in smaller volumes. This Fueling Stations makes it more economical to transport. To make LNG, natural gas is cooled The locations of public CNG and cryogenically to a liquid (roughly LNG fueling stations are maintained -260°F). It is stored in this cold liquid in a database available to the form in large cylinders. To use in public through the Alternative Fuels vehicles, the liquid gas is warmed back Data Center (AFDC) of the into a gaseous state. U.S. Department of Energy. Look for the “Alternative Fuel LNG is preferred by many heavy-duty Station Locator” at vehicle fleets because of its higher www.afdc.energy.gov/afdc/.

52 Biomethane for Transportation: Opportunites for Washington State energy density, which allows the vehicles to reduce the space required for fuel storage so they can carry bigger payloads and travel farther between fill-ups. The United States has a limited number of facilities that produce LNG for vehicles. LNG is commonly shipped from these facilities and stored at fleet-based storage facilities around the country, so transportation costs between the source and the end user is a major economic consideration (Yborra, 2011).

Until recently, LNG was an import market, with a few major import terminals in the southern United States. However, as U.S. natural gas supplies increase due to exploitation of recently opened shale gas deposits, talks about the development of LNG for export, especially to Asia, have begun. Natural gas that may sell for $4 per million British thermal unit (MBTU) in the United States or Canada can be piped to the West Coast, liquefied, and shipped via tanker to Japan at a total cost of $9 per MBTU. The spot price in Asia for natural gas can be $11 or $12 per MBTU. This favorable situation has prompted discussion on the West Coast, especially in Oregon, about developing an LNG export terminal (Sickinger, 2011).

The production of bio-LNG or renewable LNG (RLNG) requires very large volumes of biomethane. For example, because of the requirement to keep LNG very cold, it is not convenient or economical to fill a 10,000-gallon delivery truck over a period of days. Realistically, a facility needs to produce at least a truckload each day. For this reason, LNG has been economical on very large projects at landfills, but is a less realistic option for WWTPs or dairies (Wegrzyn, 2011).

Distributing Compressed Biomethane

When considering a project to produce biomethane for transportation, developers need to consider the costs to deliver the biomethane from its source to the end user. This large hidden cost can pose problems if not considered carefully.

The distribution of compressed biomethane may be simple if the end user is on or next to the source facility or visits there regularly. It is likely not a coincidence that the two successful bio-CNG projects undertaken by dairy producers have their own fleets of trucks that were converted to use the fuel directly from fuel pumps at the dairies. Some projects to convert landfill gas to vehicle fuel have succeeded because the refuse trucks that use the biomethane regularly visit the landfill. On the other hand, a biomethane source on one side of a state would have to use the natural gas pipeline system to get biomethane to an end user on the other side of the state or to users in another state. This connection works if the pipeline is close by. Otherwise, the source needs to lay additional pipeline to make the connection to the distribution line.

The New York State Energy Research and Development Authority completed a study in 2006 that included a detailed analysis of the added cost of burying different sizes of gas pipe to connect a biomethane source to a natural gas distribution line. They looked at different sizes of pipe to allow for smaller or larger gas flows over time. They also looked at costs by length, up to one mile. The cost of pipe and installation, plus an additional 50 percent for fittings, is provided in Table 11.

Biomethane for Transportation: Opportunites for Washington State 53 Altamont Landfill Vehicle Research LNG Project Institute’s Biomethane Project The Altamont Landfill LNG Project in Livermore, CA, has received a The Vehicle Research Institute (VRI) lot of attention as one of the first at Western Washington University biomethane projects to focus on (WWU) has for many years pro- transportation. Waste Management moted vehicle efficiency and the use completed the project in 2009 with of alternative vehicle fuels. Located support from the California Energy in one of the major dairy-producing Commission, Cornerstone Environ- regions of the state and not far from mental Group, Guild Associates, and the site of the first dairy digester in Linde. Linde built the gas processing Washington, they turned their at- plant based on patented designs tention to the potential to produce from the Gas Technology Institute biomethane for transportation. (GTI). In cooperation with the VanderHaak In 2004, the landfill had more than Dairy and Bellair Airporter Shuttle, a 36 million tons of waste in place. local provider of shuttle and charter The biomethane project processes bus services, VRI developed a project about 3 million cubic feet of landfill to demonstrate the value of CNG for gas daily, yielding 13,000 gallons fleet companies and the potential of LNG that is used by 300 Waste for cleaning biogas from the dairy Management garbage trucks. The digester using a modified chemical company estimates the project (amine) scrubbing technology. displaces more than 2.5 million gallons of diesel fuel annually and With grant support from the Ameri- reduces their greenhouse gas can Recovery and Reinvestment Act emissions by 85 percent. provided through the Western Wash- ington Clean Cities Coalition, VRI has installed a facility that compresses natural gas into CNG and a card-operated fast-fill dispensing unit at the dairy, which is just on the American side of the State Route 539 border crossing with Canada. VRI continues to work to create a gas scrubbing system, which they expect to begin operating in 2012 (Leonhardt, 2010, 2011).

54 Biomethane for Transportation: Opportunites for Washington State Table 11. Cost of Pipeline Connects to Another alternative being tried in Natural Gas Network Whatcom County requires the end Cost with user, a company that runs shuttle Diameter Length buses to SeaTac Airport, to drive to the Fittings VanderHaak Dairy where WWU has 0.25 miles $28,611 installed a fast-fill CNG station. It takes 1/4 inch 0.5 miles $57,222 the shuttle driver an extra 15 to 20 1.0 miles $114,444 minutes each way to go to the farm for 0.25 miles $36,630 fuel. This is an acceptable expense only 1/2 inch 0.5 miles $73,260 to the extent that the company saves enough on fuel and other costs to make 1.0 miles $146,520 up the difference. 0.25 miles $51,480 1 inch 0.5 miles $102,960 Another option requires the 1.0 miles $205,920 biomethane source to inject CNG into 0.25 miles $94,050 cylinders that are delivered by truck to 2 inch 0.5 miles $188,100 the end user. This system could use one large tank or several smaller cylinders. 1.0 miles $376,200 As one “tube truck” is delivered, (Roloson, et al., 2006) another is taken back to the source to be refilled. This option requires that multiple tube trucks be purchased or leased so drivers can move trucks back and forth from the bio-CNG source to end users.

CNG tube trailer delivers gas directly to the end user. Photo: Alibaba.com

Biomethane for Transportation: Opportunites for Washington State 55 Biomethane-Hydrogen Transportation Link, Joint Base Lewis-McChord

The U.S. Armed Forces Command at Joint Base Lewis-McChord (JBLM, formerly Fort Lewis) near Tacoma, WA, is hosting a major project innovation through a contract with the Center for Transportation and the Environment (CTE). Project partners include Air Products, Gas Technology Institute (GTI), Plug Power, and Proterra.

The project will use biomethane from the on-base wastewater treatment plant biogas to produce hydrogen as fuel for base vehicles. According to CTE, the project “includes all of the key elements of a clean hydrogen energy cycle: • A renewable energy supply in the form of recovered wastewater treatment plant digester gas • Local hydrogen generation via digester gas cleanup and reformation • Bulk hydrogen storage, transport, and dispensing • Hydrogen load in the form of 19 fuel cell-powered electric forklifts and one fuel cell-powered shuttle bus, with an option for a stationary fuel cell system.”

GTI will supply the hydrogen generation system, which has three parts: digester gas cleanup, biomethane reformation, and hydrogen purification. Once complete, the system will generate over 50 kg of hydrogen daily – enough to fuel a shuttle bus and 19 warehouse lift trucks fitted with fuel cells. Proterra will design and build the 35-foot composite-body, plug-in battery-dominant fuel-cell hybrid electric bus. The bus will transport staff around Joint Base Lewis-McChord. The gas will be distributed from the source to the dispensing units using two tube trucks, which will take turns delivering compressed hydrogen to the dispensing unit and refilling at the generation site. On-site power generation is also an option that can be done by diverting a separate stream of hydrogen to a stationary fuel cell system (Hanlin, 2009).

56 Biomethane for Transportation: Opportunites for Washington State Biomethane Technology Vendors

Some of the many companies that provide technology for cleaning biogas are listed in Table 12. Some of these companies also provide project development and financing capabilities.

Table 12. Technology Providers

Technology Summary Notable Projects Provider • Burlington County Resource Acrion Recovery Complex and New Technologies Provider of a water-scrubbing technology Jersey EcoComplex, Cleveland, OH named “CO2 Wash Process.” Columbus, NJ www.Acrion.com/ • Novo Gramacho Landfill, Rio de Janeiro, Brazil More than a dozen projects, including: Supplies gas-handling equipment to cus- Air Liquide – US • Cedar Hills landfill, King tomers in 80 countries. In this sector they Houston, TX County, WA supply the “MEDAL Biogas Membrane • Point Loma WWTP, San www.AirLiquide.com System” for biogas and landfill gas. Diego, CA • Fresno WWTP, Fresno, CA Applied Filter Custom-designed biogas-to-energy • South Carolina Landfill No. 1 Technology systems for many industries, including & No. 2 Bothell, WA chilling, compressing, and removal of • Paris Landfill, France • Dozens of additional www.AppliedFilter sulfur, CO2 and siloxane. Uses a propri- projects for simple siloxane or Technology.com/ etary graphite molecular sieve to adsorb siloxane. H2S removal Cornerstone • Rodefeld Landfill, Dane Environmental County, WI Group LLC Complete biogas to CNG systems, from Middletown, NY 50 to 200+ scfm production. www.Cornerstoneeg. com/ Part of the Flotech Group, a supplier of • Landfill Gas Project, Detroit, Greenlane Biogas natural gas and gas upgrading equip- MI, with Canton Renewables/ NA Ltd ment. Greenlane offers six standard Clean Energy Burnaby, BC modular designs, featuring an advanced • Fair Oaks Dairy, Fair Oaks, IN, energy-efficient pressurized water-scrub- with UTS Residual Processing

www.Greenlane bing system to remove CO2 and H2S. and Clean Energy Biogas.com/en/home Capacity from 50 to more than 3,000 scfm biogas.

Continued on nexr page.

Biomethane for Transportation: Opportunites for Washington State 57 Table 12. Technology Providers, continued

Technology Summary Notable Projects Provider

Biogas to LNG technology, including • Municipal Landfill, purification and liquefaction of vari- Victoria, BC Prometheus ous methane-bearing gas streams on a • Stranded gas well, Energy small scale to a unique method for the Sacramento, CA Redmond, WA bulk separation of CO from waste gas • Frank R. Bowerman Landfill, 2 Orange County, CA with www.Prometheus streams. Process utilizes filters, phase Applied LNG Technologies Energy.com separators, selective reactions, physiad- sorption, freezing and cryogenic refrigeration techniques to purify and liquefy the biogas.

Quasar Energy Group builds, owns, and • Ohio Ag R&D Center, Quasar Energy operates digester projects using munici- Wooster, OH Group pal organics, food processing byproducts • Zanesville Organic Waste Cleveland, OH and agricultural wastes. Its subsidiary Project, Zanesville, OH company, Biogas Technology Unlimited, • PPG Industries Reclamation www.QuasarEnergy Project, Barberton, OH Group.com provides gas cleanup systems for their projects • Biffa Waste Services AD plant, A European provider of advanced waste Ros Roca Envirotec Cannock, United Kingdom Lleida, Spain collection, biomass energy, and composting projects. They provide gas cleanup www.RosRoca systems using pressure water-scrubbing Envirotec.com technology.

Xebec’s expertise in natural gas dry- • Hilarides Dairy Farm, Xebec Adsorption ing and CNG fueling combined with Lindsay, CA Inc. (merged with QuestAir’s excellent pressure swing • Also SEMPRA, Montauk QuestAir) adsorption technology to treat biogas for Energy, Halla Engineering, Blainville, Quebec distribution in pipelines or as transporta- Terasen Gas www.xebecinc.com/ tion fuel. Capacity ranges from 150 to 5,000 Nm3/h.

58 Biomethane for Transportation: Opportunites for Washington State Chapter 4: Economics of Biomethane for Transportation

The research completed for this Washington state biomethane assessment found more than a dozen active renewable gas projects in the United States, only a few of which use biomethane for transportation. There are currently no operational transportation projects in Washington. As a result, very little actual cost-benefit data can be compiled or analyzed. More complicated still, the projects that do exist range over a wide time span and involve different sources of biogas, different types of clean-up technology, and a range of end users and geography.

Nonetheless, several studies completed in recent years as well as data from equipment manufacturers provide some helpful perspectives on the relative costs of biomethane projects and of various clean-up technologies.

California Dairy Biomethane Study One of the first detailed examinations of the economics of producing biomethane was completed in 2005 by a group of California researchers. Working on behalf of the Western United Dairymen, the research team looked in detail at the costs, benefits, challenges and opportunities for developing biomethane projects based on dairy digesters. California has the largest number of dairy cows of any state, often concentrated on large dairies. In addition, because California has an increasing number and complexity of regulations affecting electricity generation by internal combustion generators, biomethane looked promising. Though their focus was on biomethane for pipeline injection, their research is applicable to transportation end uses as well.

Based on experience around the country and in California, the team estimated the costs of a dairy anaerobic digester facility while isolating the costs of electricity- generating plants at those facilities. Because no biomethane projects existed in the United States, they estimated the costs of biogas upgrading based on actual operating parameters and associated costs from four Swedish biogas-to-biomethane plants.

The analyses they conducted combined to produce estimated costs for three hypothetical dairy anaerobic digestion and biogas-to-biomethane facilities. The results are shown in Table 13.

This evaluation shows that the added cost of installing and operating an upgrading facility at a small dairy facility (45,000 cf per day) could be $8.12 per 1,000 cf of biomethane. For a larger dairy facility (240,000 cf per day), which might be compa- rable to a medium-sized wastewater treatment plant (WWTP) or landfill, the costs could range from $5.45 to $8.56 per 1,000 cf (Krich, et al., 2005).

Biomethane for Transportation: Opportunites for Washington State 59 Table 13. Estimated Costs for Hypothetical Dairy Biogas-to-Biomethane Projects

No. of Dollars per 1,000 cf Biomethane Cows Estimated Cost for Estimated Cost for Methanea Estimated Facility or Cow Anaerobic Digester Biogas Upgrading cf/day Total Cost Equiva- $/1,000 cf $/1,000 cf lents Capital O&M Capital O&M $/1,000 cf Small 1,500 45,000 3.10 0.60 3.10 5.02 11.82 Dairyb Large 8,000 240,000 2.48 0.50 1.74 3.71 8.44 Dairy Ac Large 8,000 240,000 2.48 0.50 1.74 6.82 11.54 Dairy Bd a Based on an approximate methane yield of 30 cf/cow/day. b Small Dairy: Operating costs based on average of three Swedish plants; capital costs based on Kalmar plant. c Large Dairy A: Operating costs and capital based on Boras plant in Sweden. d Large Dairy B: Operating cost based on Linkoping plant in Sweden; capital costs based on Boras plant. Source: Krich, et al., 2005

New York Biogas Processing Study A team of researchers from New York State Electric & Gas Corporation and Cornell University completed a study of biogas from dairies in 2006. They focused on biogas characterization and biogas processing and upgrading. They also completed a detailed economic assessment of injecting dairy biomethane into the natural gas pipeline (Roloson, 2006).

The team looked at overall capital costs for projects based on various cow herd sizes: 500, 1,000, 3,000, 5,000, and 10,000. For capital cost data, they used information provided by two companies with long histories of involvement in this space – Applied Filter Technologies (AFT) and Cogeneration Technologies. They also included operation and maintenance (O&M) costs using AFT data for cleanup systems used at landfills. Reflecting economies of scale in gas cleanup, AFT estimates that capital and O&M costs for 500- and 1,000-head projects are approximately the same.

Next the team looked at the potential impact of distribution costs in the form of added costs for installing pipeline to reach the natural gas distribution line from ¼-mile, ½-mile, and 1 mile. (One part of the equation that appears to be lacking is the expense of the intertie connection to the distribution pipeline. This can be a large expense, which they rightly indicate is site specific.) Once these capital and O&M costs were compiled, the team explored the sensitivity of the economics to interest rates, at levels of 3 percent, 5 percent, and 7 percent. These various costs over a 10-year project period were compared against possible gas sales revenue based on prices of $4/MBTU to $14/MBTU, in $2 increments. Results of their analysis follow. 500-cow dairy • $12/MBTU is needed to “break even,” assuming there is no added pipeline cost and the interest rate is 3 percent. • $14/MBTU is the sales price required if ½ mile of pipe is added to the capital cost and assuming the interest rate remains low.

60 Biomethane for Transportation: Opportunites for Washington State 1,000-cow dairy • At least $6/MBTU is necessary to be profitable under any circumstance. • At $8/MBTU, a profit is possible as long as the pipe connection is ½ mile or less. • At $10/MBTU, a profit is possible even with 1 mile of pipeline and higher interest rates.

3,000-cow dairy • Even at $4/MBTU, the project can make a profit with no added pipeline and a low interest rate. • $6/MBTU is needed if added pipeline is required, but it will still be profitable with even 1 mile of added pipe and higher interest rates.

5,000-cow dairy • Even at $4/MBTU, the project can make a profit with no added pipeline and a low interest rate. • At $6/MBTU, the project can make considerable profit over the 10-year period: over $1 million at low interest rates, even with ½ mile of added pipe.

10,000-cow dairy • $3.50/MBTU is the “break even” sales price for a project of this size. • At $4/MBTU (no pipe added and low rates), more than $1 million in profit is possible.

CalStart A white paper published by CalStart in 2010 analyzed the cost of producing biogas from dairy waste and of upgrading that gas to pipeline quality biomethane. The paper concludes that “biomethane has the potential to be produced cost-competi- tively with conventional natural gas using feedstocks and processes available today” (Chen, 2010).

The paper’s authors used a broad variety of published data, articles, and inter- views to calculate relative costs for producing biogas. They analyzed the capital, operating, and maintenance costs of producing biogas from 20 individual dairy projects around the country using four different digestion methods. Project sizes ranged from 11,333 to more than 250,000 cubic feet per day. The authors found that the cost per cubic foot of biogas ranged widely from $0.38 to $8.00. The average cost of production was $2.11 per cubic foot. The median value from their analysis was about $1.50 per cubic foot. Three quarters of the projects produced biogas for less than $2.16 per cubic foot. The four largest facilities had an average cost of production of $0.99 per cubic foot.

Similarly, the authors evaluated the relative costs of upgrading biogas to biomethane by looking at 33 farms, landfills and other facilities. They discovered that facilities may scrub gas for hydrogen sulfide (H2S), carbon dioxide (CO2), and

Biomethane for Transportation: Opportunites for Washington State 61 water vapor. Not all facilities did all three upgrading steps. They also found that the potential for competitive upgrading costs is very sensitive to scale.

Using the data in the white paper, it is Table 14. CalStart – Estimated Costs for possible to go a step further to develop Upgrading to Biomethane total cost scenarios in three general size categories. To make comparisons for Calculated cost of Biomethane Facility upgrading to all three sizes of facilities, we used the produced Size biomethane biomethane upgrading costs shown in cf/d Table 14. For the biogas production cost $/1,000 cf at small facilities, we used the average Small < 100,000 7.12 cost for all facilities; for medium-sized 100,000 to Medium 3.92 facilities we used the median cost; and 1,000,000 for the large facility we used the average Large >1,000,000 0.0489 of the costs for the four largest facilities in the data set. Results are shown in Table 15. This analysis confirms the importance of scale in the relative cost of making biomethane.

Table 15. CalStart – Estimated Total Costs for Upgraded Biomethane

Biogas Biomethane Total Cost Total Cost* Facility Size Production Cost Upgrading Cost $/1,000 cf $/MMBTU $/1,000 cf $/1,000 cf Small 2.11 7.12 9.23 8.99 Medium 1.50 3.92 5.42 5.28 Large 0.97 0.0489 1.02 0.99 *Calculated as 1 cubic foot = 1,027 BTU

Tillamook County Bioenergy Feasibility Study In 2011, the Tillamook County, Oregon, Solid Waste Authority sponsored a study to assess the feasibility of converting additional municipal and agricultural waste and byproducts into biogas for power or fuel. The project was completed by TetraTech with several goals in mind: control local liabilities, develop clean energy resources, create new job potential, and reduce the County’s carbon footprint.

The project team evaluated a wide range of feedstocks, including dairy manure and dairy mortalities; fats, oils, and grease (FOG) from local businesses; meat processing byproducts; and brewery wastewater. Anaerobic digestion, followed by composting of the digested solids, was determined to be the most viable technology at this time. Though the brewery wastewater was eventually left out of the mix, the project

62 Biomethane for Transportation: Opportunites for Washington State team developed three scenarios for development of conceptual designs and lifecycle financial analyses. These are outlined as follows:

1. Manure from 3,000 cows, plus cow mortalities, FOG, and meat byproducts, producing biogas to power a 0.9 MW CHP system for renewable electricity. 2. Manure from 6,000 cows, plus cow mortalities, FOG, and meat byproducts, producing biogas to power a 1.8 MW CHP system for renewable electricity. 3. Manure from 6,000 cows, plus cow mortalities, FOG, and meat byproducts, producing biomethane for a 700,000 DGE/year CNG for transportation system. The analysis for this scenario included vehicle conversion costs in the capital expense to build local vehicle capacity. It also assumed a 25 percent discount from diesel costs for the bio-CNG.

Table 16 shows the results of TetraTech’s financial analysis for the three scenarios.

As reported to the Solid Waste Authority, the smaller scenario does not produce sufficient revenue to generate a profit without significant grants or subsidies to offset loan repayment costs. Scenario 2 is better able to take advantage of economies of scale and is essentially a cost-neutral project. The costs per wet ton processed go down from $87/ton in Scenario 1 to $77/ton in Scenario 2.

Scenario 3 is the most capital intensive of the three, with capital expenses of nearly $15 million. This reflects the high capital requirements for biogas clean up,

Table 16. Tillamook Bioenergy Feasibility Study – Financial Modeling Projections

Scenario 1 Scenario 2 Scenario 3 Performance Metric 3,000-Head 6,000-Head 6,000-Head AD + CHP AD + CHP AD + CNG Total Construction Cost $7,405,276 $12,467,500 $14,069,400 Construction Cost / Wet Ton Processed $87.32 $77.20 $88.77 Annual Total Revenues $872,977 $1,700,449 $2,629,421 Annual O&M Cost $408,226 $560,204 $692,640 Annual Capital Repayment $652,457 $1,111,074 $1,300,525 Annual Net Profit (Loss) ($187,706) $29,171 $636,255 20-Year Net Present Value (NPV) ($39,843,295) ($25,349,500) $37,529,585 Annualized NPV ($3,197,129) ($2,034,109) $3,011,471 20-Year Internal Return on 5 percent 9 percent 13 percent Investment (IRR) Simple payback Year 15 Year 12 Year 8

Biomethane for Transportation: Opportunites for Washington State 63 compression and fueling, and vehicle conversions. On the other hand, this scenario offers the highest project returns, based on the value of bio-CNG relative to diesel fuel.

Summary Compared with diesel, compressed natural gas (CNG) from natural gas is significantly less expensive, with wholesale prices near $1.00 per diesel gallon equivalent (DGE) and recent retail prices reported at $1.75 per DGE. The economics of biomethane can be summarized as somewhere in the middle, between natural gas and diesel fuel. In other words, producers contend that bio-CNG can be produced for around $2.00/DGE. That would place it at about twice the cost of natural gas and half the cost of diesel fuel. This description is supported by conclusions made by other sources about the comparative values of biomethane and other fuels (Baragetti, 2011):

• Diesel = $22.00 per MMBTU • Natural gas = $6.70 per MMBTU • Biomethane = $12.00 per MMBTU • Electricity = $26.60 per MMBTU

The project team developed Figure 13 to illustrate the position of biomethane opportunities among various alternatives on an MBTU equivalent basis. The cost of producing biomethane falls with the benefits of economies of scale. Once they pass the reported thresholds for project size, the estimated costs drop below those reported for electricity production.

Only the largest landfill projects currently have the size and scale to compete directly with natural gas as CNG. They can produce bio-CNG for retail sale at roughly $2.00 per DGE (Mazanec, 2011). More modest projects, at or near the reported thesholds, find the comparison to diesel more attractive. As described earlier, large dairy projects have also found that economic sweet spot by using biomethane directly to offset purchases of diesel.

Beyond the straight fuel-to-fuel comparison, it is important to remember that biomethane is a renewable gas and has extra value to the environment and society as a renewable fuel. Historically, these large environmental or societal values have not always translated well in monetary terms. This is the topic of the next chapter.

Finally, biomethane is not the only renewable transportation fuel or the only renewable substitute for diesel. As the markets develop, biomethane will have to compete with biodiesel, cellulosic ethanol, hydrogen and other emerging alternative vehicle fuels.

64 Biomethane for Transportation: Opportunites for Washington State Figure 13. Biomethane Costs $/mmBtu = $/1,000 scf

$25.00 $25 Reported Thesholds Diesel Dairy 8,000 Cows Retail $20 WWTP ~ 17 MGD Landfill 2+ Mil TIP $17.00

$15 $11.82* Oil $8.99** Wholesale $10 $5.28** $7.22*** Electricity AD Dairy Plug Flow $5 $0.99** $3.50 Natural Gas Wholesale $0 45 cfd <100K cfd <1 Mil cfd <1 Mil cfd Dairy with Dairy with Wastewater Landfill 1,500 Cows 3,333 Cows Treatment >3 Mil TIP –– Plant WWTP 15-150 MGD <15 MGD

* Krich, et al., 2005 ** Chen, 2010 *** USDA, NRCS, 2007

Biomethane for Transportation: Opportunites for Washington State 65 Chapter 5: The Value of Environmental Attributes

While natural gas is cleaner than gasoline or diesel, biomethane is cleaner still than natural gas. The question is: What monetary value can be attributed to and gained from the environmental benefits of these fuels?

Natural gas reduces air pollution and particulate pollution and emits less carbon

dioxide (CO2) than its petroleum competition. Because biomethane is chemically the same as natural gas, its additional environmental benefits occur “upstream” of the vehicle. The production of biomethane often involves the capture of existing sources of biogas that release methane – a potent greenhouse gas (GHG) – into the atmosphere. Methane released to the air has 23 times greater global warming

potential than CO2.

Biomethane is also a locally derived renewable fuel, so it also generates local economic and societal benefits that are not clearly monetized except as a matter of government policy.

Because the sweet spot for biomethane economics is so often tied to the environmental benefits of the source project and the fuel, environmental regulations and incentives play an important role in advancing biomethane projects. These environmental effects fall into two main categories: renewable energy and renewable fuel incentives, andGHG reductions.

Renewable Energy Incentives Renewable energy incentives often take the form of a preference for renewable fuel sources in corporate or government purchasing decisions. They may also take the form of mandates, as is the case for Washington State and many local government agencies. They can also take the form of renewable portfolio standards imposed on utility providers. In Washington, the applicable law – developed through the passage of Initiative 937 – requires certain power utilities to have 15 percent renewable electricity in their power portfolios by 2020. However, Initiative 937 only applies to the development of renewable electricity, so it currently favors the use of biogas for renewable electricity over the use of biomethane for alternative vehicle fuel.

Renewable Fuel Standards As a renewable gas, biomethane used as alternative vehicle fuel, whether directly or after transportation by pipeline, may be a way to comply with the federal Renewable Fuel Standard (RFS) or California’s state-mandated Low Carbon Fuel Standard (LCFS).

The federal RFS was created by Congress through the Energy Policy Act of 2005. It was updated in the Energy Independence and Security Act of 2007 (EISA). The new standard, known as RFS2, sets annual mandates for four types of alternative fuels, based on lifecycle GHG emissions levels relative to a 2005 baseline of petroleum.

66 Biomethane for Transportation: Opportunites for Washington State The four alternative fuel types include: renewable fuel, advanced biofuel, biomass- based diesel, and cellulosic biofuel. The final rule was published in 2010 and contains mandates through 2022.

EPA manages the RFS rule and assures compliance. Renewable fuel types and mandates are given in Table 17.

Table 17. Renewable Fuel Types in RFS2

Percent reduction from Fuel Type displaced gas/diesel Comments (2005 baseline) Produced from renewable Renewable fuel 20 percent biomass Renewable fuel other than Advanced biofuel 50 percent ethanol from corn starch Includes biodiesel and Biomass-based diesel 50 percent non-ester renewable diesel Fuel derived from cellulose, Cellulosic biofuel 60 percent hemicelluloses or lignin from renewable biomass Source: Pew Center

The RFS2 mandates translate into specific targets for gallons of fuel as shown in Figure 14.

Figure 14. Renewable Fuel Standard Mandates, by Type, 2008-2022

Billions Gallons 40 Biomass-based diesel (biodiesel) Other advanced biofuels 30 Cellulosic biofuels Implicit nonadvanced biofuels (maximum) 20

0 2008 2010 2012 2014 2016 2018 2020 2022 Calendar Year Note: Biofuel RFS specified through 2012; subsequent years “shall not be less than the applicable volume... for calendar year 2012.”

Biomethane for Transportation: Opportunites for Washington State 67 These national level RFS2 mandates shown in Figure 14 are prorated, according to relative annual production or import levels, to individual gasoline or diesel fuel producers, known as “obligated parties.” The EPA monitors compliance by obligated parties through the use of Renewable Identification Numbers (RINs), which EPA uses to track the production and distribution of alternative vehicle fuels for RFS2. Producers of renewable fuels assign individual serial numbers to every gallon of alternative fuel produced, and they report these numbers to EPA. Through this tracking mechanism, RINs can be distributed and traded among certified users. This allows the fuel commodity to be separated from the renewable attributes, which means the fuel commodity and the RINs can be sold together or separately, as the market players choose.

Biomethane qualifies as an Advanced Biofuel under the RFS. However, while RINs for ethanol and biodiesel have developed multi-year transaction histories, no known transactions for bio-CNG or bio-LNG have been made to date. This makes it challenging to assign any monetary value to these attributes.

For their bioenergy feasibility study for Tillamook County, Tetra Tech did some valuable research into the use of RINs in the near future. As of July 2011, the Tetra Tech team found biodiesel RINs trading at around $1.30/gallon and Advanced Biofuels RINs trading at around $0.75/gallon equivalent (for biogas, 77,000 BTUs is equal to 1 gallon equivalent or 1 RIN). They found ethanol RINs had been trading at near $0.03/gallon for several months. The difference in these prices are a function of the balance of demand (the level of mandated targets) versus the supply of RINs, with a dash of speculation added to the equation. Based on their research and analysis, Tetra Tech set three prices for comparison: low = $0.20/gal equivalent; medium = $0.50/gal equivalent; and high = $0.75/gal equivalent. The high-level mark reflected the value of Advanced Biofuel RINs at that time.

The Oregon project team concluded, “Although the value of RINs are fully dependent on the annual fluctuations of fuel mandates decided by the US Congress, industry insiders are confident that RINs will be a valuable tool going forward.”

California Low-Carbon Fuel Standard Another California policy that is having an incentive effect is the LCFS. Established by Executive Order in 2007, the LCFS establishes a statewide goal of reducing the carbon intensity of California’s transportation fuels by at least 10 percent by 2020. It applies to all refiners, blenders, producers and importers of transportation fuels and is measured on a full fuels cycle basis. It can be met through market-based methods, meaning providers that exceed their performance requirement can receive credits that can be applied toward future obligations or traded to providers that have not met the standard.

Biomethane benefits from the California RFS in two ways. First, biomethane itself is a very low-carbon fuel. It reduces GHG emissions roughly 80 percent. The

68 Biomethane for Transportation: Opportunites for Washington State California Air Resources Board (CARB) recognizes bio-CNG as one of the lowest carbon fuels available.

Second, any other transportation fuel provider using low-carbon renewable power or fuels in the manufacture or distribution of fuel lowers the carbon intensity of that fuel. This has the effect of rewarding biomethane injected into the pipeline and sold in California for use in various fuel industries. It could be used in the production of ethanol or as bio-CNG in gasoline tanker trucks, and provide a benefit under the LCFS.

These and other opportunities have been discussed widely in the natural gas and renewable gas sectors, but they remain untested. Washington biogas producers report being approached by representatives from California transportation fuel providers, but there remains a huge gap between the concept of a California market and reality. As a result, it is difficult, if not impossible, to estimate the value of this option as a market opportunity. One of the significant risks is the politics surrounding California mandates and the desire of some advocates to protect in-state production through preferential treatment.

Washington Low-Carbon Fuel Standard Washington State officials have also discussed the potential value of a LCFS. The Governor in 2009 directed the Department of Ecology, in coordination with the departments of Transportation and Commerce, to assess the impacts of a LCFS. Ecology, working with TIAX, evaluated a standard for reducing the carbon intensity of transportation fuels by 10 percent from 2007 levels by 2023. The analysis looked at the range of alternative vehicle fuels, with particular focus on ethanol and biodiesel. Renewable CNG derived from waste feedstocks was included in the possible fuel mix.

The evaluators summarize their findings as follows:

The LCFS is the preferred approach for reducing transportation sector GHG emissions. A regulatory approach could achieve similar levels of emissions reductions but there are drawbacks….Traditional incentives are costly and yield only modest emission reductions that are not necessarily sustainable without continued funding…. Transportation pricing mechanisms would result in very high costs in the short-term as there are limited alternative options available. Moreover, carbon taxes are regressive and therefore politically difficult to implement. However, pricing mechanisms are very efficient and may be the favored approach once alternatives to petroleum are truly available. A LCFS over the next ten years could pull real alternatives into the marketplace so that in 2023, a pricing mechanism might be a viable alternative.

Biomethane for Transportation: Opportunites for Washington State 69 Greenhouse Gas Reductions Biomethane use in transportation provides an enormous reduction in GHG pollution when compared to diesel fuel and compressed natural gas (CNG). Researchers in Europe have been studying the impacts of their choice to use biomethane for transportation vehicles. A study by German scientists reported by the German Energy Agency offered the comparative results shown in Figure 15. Figure X8. Figure 15. Well-to-Wheel GHG Emissions WTW GHG Emissions in CO2 c.q./km Source: DENA – German Energy Agency

200 -24% -39% -97% 174 164* 156 160 141 124 120 111 100 95

c.q./km 75 2 80 CO 40 5 8 5 0 Fossil Fuels Biofuels Electric Drive

) ) d, x) x er) ter Gas ble e Petrol Diesell al nure) ed) mi mi l fi a e ow ur ewa Ethanol f er er Auto Gas gas mix) (m Biodiesell rtia l rapese Hydrogen Hydrogennd power)E-Mobility E-Mobilitynd p ma i i pa Natura Natural Gas i pow w pow w t % Ren on (EU (EU na 0 (with 100% Renewable sugar beet, waste th 2 (based (100% (100% (EU on wi material animal glycerolfeed) an

(based

* Reference vehicle: gasoline engine (induction engine), consumption 71 per 100 km. Source: DENA – German Energy Agency

In the United States, scientists at Argonne National Laboratory have been a chief source of data about the lifecycle GHG emissions of fossil and renewable transportation fuels. The lab manages the creation, use and modification of the models developed for EPA under the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Program. The GREET model estimates emissions of GHG and criteria pollutants. Researchers completed an assessment of landfill gas used for bio-CNG and recently completed a draft of the impacts of digester biogas from dairy manure. They continue to refine lifecycle estimates and explore pathways to GHG reductions for a range of alternative vehicle fuels.

The results of the modeling for landfill gas indicate that well-to-wheel (WTW) GHG emissions drop from approximately 93 grams per megajoule (g/MJ) for gasoline or diesel to about 74 g/MJ for fossil natural gas. By comparison, WTW GHG emissions for renewable CNG are 16-18 g/MJ and 21-22 g/MJ for renewable LNG using electricity from the grid. The GHG benefit achieved by using renewable natural gas (RNG) made from landfill gas is greater by far than that of any available alternative fuel – and is about equal to the benefit of renewable hydrogen (which is not yet commercially available).

70 Biomethane for Transportation: Opportunites for Washington State Figure 16: GREET Estimates of the PTW, WTP and WTW Fuel Use and Emissions by Technology

1.40 CNG LNG 1.20

1.00

0.80

0.60

0.40

0.20

0.00 100 CNG LNG 80

e/MJ) Fossil Fuels (MJ/MJ) 60 2 40 20 0 -20 -40 GHG Emissions (gCO -60 Diesel Gasoline Plug Flow Plug Flow PTW

WTP Complete Mix Complete Mix Covered Lagoon Covered Lagoon WTW Mixed Plug Flow Mixed Plug Flow Conventional NA NG Conventional NA NG

The results of modeling for conventional and biomethane forms of CNG and LNG produced from biogas originating from different types of animal waste digesters is summarized in Figure 16. Fossil fuel use per MJ is lowest for bio-CNG produced from biogas from a covered lagoon digester, mainly because covered lagoons typically operate at ambient temperatures with long hydraulic retention times and thus have smaller energy inputs. Fossil fuel use per MJ is lowest for bio-LNG because the LNG is assumed to power the liquefaction and distribution by truck.

Biomethane for Transportation: Opportunites for Washington State 71 Emissions of GHGs by digester technology follow similar patterns, indicating that the various technologies mitigate methane loss to the atmosphere efficiently. The differences among the digester technologies are very small compared to the differences between all biomethane sources and conventional natural gas.

The GREET model is available to the public to use for modeling purposes. See the website at: http://www.transportation.anl.gov/modeling_simulation/GREET. Worldwide, there are more than 15,000 registered users.

This GHG emission reduction benefit can be measured in many ways. Though there is no federal reduction mandate or market for carbon credits, many corporations are being proactive about setting and meeting targets for reducing GHG impacts. For many manufacturers or wholesale suppliers of goods and services, this has become a retail sustainability mandate. In recent years, some large retailers have imposed a series of carbon accounting procedures on all of their suppliers and vendors. This has forced these companies to become more aware of GHGs and their role in company operations which, in turn, has forced these companies to calculate the costs and benefits of GHGs in relation to being permitted to do business with retail buyers that have carbon accounting procedures.

In addition, two state-level markets for GHG emissions are taking hold. In the Northeast, the Regional Greenhouse Gas Initiative (RGGI) has been in operation since 2008.

In California, the assembly passed AB 32 – the Global Warming Solutions Act of 2006 – which establishes a target for overall reduction in carbon emissions of 83 percent by 2050. Caps set on industries throughout the state will impose added costs on the use of high-GHG fuels such as diesel and gasoline.

Further, California is moving forward with creation of a cap-and-trade marketplace for GHG emissions, through which regulated entities (large GHG polluters) will be required to obtain GHG allowances or GHG offsets to comply with annual reduction targets. GHG offsets, also referred to as carbon credits, allow regulated entities to pay and get credit for GHG reductions undertaken by entities that are not required to make reductions. These voluntary reductions of GHGs throughout the market may be more cost effective than actions available to individual regulated entities. This mechanism provides for overall GHG reductions to occur, for the major polluters to pay, but for the market to find the lowest-cost methods to achieve reductions.

The Climate Action Reserve (CAR), established initially as the California Climate Action Registry, has created systems and standards for creating and validating offsets for compliance in the California market. Under current rules, California will initially recognize four types of offsets – methane capture from dairy digesters, forestry, urban forestry, and reduction of ozone-depleting substances – from projects in the United States. The California GHG market is scheduled to take effect in 2013. Current prices for carbon allowances or credits under the RGGI and CAR programs

72 Biomethane for Transportation: Opportunites for Washington State range from $1.45 to $1.93 per unit, measured as 1 metric ton of CO2 equivalent. However, this has not stopped industry watchers from predicting impressive values for carbon credits in the future. For example, the floor price for carbon allowances to be auctioned by California in the future is set at $10.00/ton. Also, recent trades at Intercontinental Exchange for CAR carbon futures (2013) have netted an average of $19.00/ton (Raphael, 2011).

These kinds of values would have a major impact on markets in Washington. Currently, Washington’s rules for renewable power generated in compliance with I937 tie up all the environmental attributes together. This is contrary to the practice in other areas, where the renewable energy credit (REC) includes the reduction of

CO2 from reduced fossil fuel power generation, but not necessarily the reduction of methane from changes in manure management practices (i.e., the addition of anaerobic digestion) prior to power generation. This rule in Washington could have the effect of driving development toward biomethane use for transportation or injection into the pipeline, allowing for the monetization of carbon credits from methane reductions in addition to alternative fuel attributes.

Biomethane for Transportation: Opportunites for Washington State 73 Chapter 6. Policies and Incentives

A variety of policies and incentives have been and are being used to support biomethane as a transportation fuel. This review includes recent and current policies to show the range of actions used and available to government officials.

Federal Policies

Energy Tax Policy Act of 2005 This legislation provided a number of incentives that supported natural gas vehicles, fuel, and infrastructure. It included a motor vehicle income tax credit for qualified alternative fuel vehicles (AFV). It applied to the purchase of a new, dedicated, repowered, or converted AFV. The available credit ranged from $2,500 to $32,000, depending on the size of the vehicle. This credit expired at the end of 2010; however, Congress provided a bonus depreciation provision, allowing businesses to depreciate vehicles like new capital equipment.

For natural gas or biomethane fuel, the act provided an excise tax credit of $0.50 per gasoline gallon equivalent of compressed natural gas (CNG) or liquid gallon of liquefied natural gas (LNG) for use as a motor vehicle fuel. This credit was introduced in 2006 and had its original sunset at the end of 2009. It was extended for two years, but it is scheduled to expire at the end of 2011. Advocates hope to get the credit extended, separately or as part of the proposed Natural Gas Act.

For fueling infrastructure, the act provided an income tax credit equal to 30 percent of the cost of natural gas fueling equipment, up to $30,000 for large stations and $1,000 for home sites. This provision expires at the end of 2011; however, Congress extended the accelerated depreciation rules for capital equipment to the type of fueling equipment – worth 50 percent of the cost of property placed in service.

American Recovery & Reinvestment Act This act increased the credit value for purchasing and installing equipment to store and dispense qualified alternative fuels when put into service during 2009-2010.

Natural Gas Act The New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011, also referred to as the Natural Gas Act, is being promoted by the natural gas industry. It provides the following provisions:

• Vehicle purchase income tax credit – extension for 5 years • Refueling property income tax credit – extension for 5 years • Motor fuels excise tax credit ($0.50/GGE) –extension for 5 years • Transferability/improved ability of tax exempt organizations to monetize vehicle and station credits. Taxable entities will be able to apply credits toward the alternative minimum tax.

74 Biomethane for Transportation: Opportunites for Washington State Washington State Policies

Washington State government has an ambitious goal for deploying alternative fueled vehicles. Government fleets at state and local levels are looking ahead at mandated targets for switching to alternative fuels in the near future. Legislators in 2007 mandated that state and local governments meet 100 percent of their fuel needs using electricity or biofuels by June 2015 to the extent “practicable,” as determined by the Washington Department of Commerce, with an interim mandate for state agencies of 40 percent by June 2013. In 2011, the local government mandate was pushed out three years by the legislature. Nevertheless, governments will be looking for ways to incorporate biofuels, so local biomethane projects may find strong support.

Additional incentives include the sales and use tax exemptions for alternative fuel vehicles, including natural gas vehicles, through June 2015. The exemptions extend to vehicles that were converted to use the alternative fuel.

Though not specific to transportation, the State of Washington has two incentives designed to support development of digesters at Washington dairies. First, the State provides a property tax exemption for six years for digester proejcts. This provision is set to continue through 2012. Second, the State offers retail sales tax exemptions for the equipment, components, materials and services for digester construction, No expiration has been set for this incentive.

Biomethane for Transportation: Opportunites for Washington State 75 76 Biomethane for Transportation: Opportunites for Washington State Chapter 7: Conclusions and Recommendations

Source Expansion • Encourage development of digester capacity through financing and loan support to encourage production of electricity or biofuel. • Encourage diversion mandates and programs to separate organic materials from MSW. • Conduct education and outreach especially for wastewater and solid waste industry officials, and provide technical assistance to potential sources. • Partner with potential sources to conduct feasibility studies for projects that expand digester capacity, incorporate new feedstocks, or evaluate gas cleanup and distribution infrastructure developments. • Partner with other agencies and advocates to expand digester capacity in the state’s dairy industry. • Support improvements in biodigester efficiency and yields. • Support research, market development, and investment in waste-to- energy efforts

End Use Market Development • Conduct education and outreach to fleets and provide technical assistance to address issues related to vehicles, fuel access, and capital for infrastructure. • Work with public agencies to leverage government contracts or other purchasing requirements in support of alternative fuels and vehicles. For example, consider if school districts could mandate or encourage adoption of alternative fuels for delivery vehicles. • Support alternative fuel infrastructure development. • Enhance vehicle subsidies.

Biomethane Policies and Incentives • Encourage federal fuel subsidies. • Maintain support for the federal Renewable Fuel Standard (RFS) and make certain it treats biomethane fairly with other alternative fuels. • Support life cycle assessments of biomethane. • Partner with other agencies and advocates to move Washington State to adopt a low-carbon fuel standard and/or a carbon tax with equal- ization components as discussed in the State Energy Strategy update. • Support markets for Renewable Identification Numbers generated through renewable fuel standard or low-carbon fuel standard regulations. • Support valuation of the emission and greenhouse gas benefits of biomethane, such as carbon reduction mandates or carbon taxes.

Biomethane for Transportation: Opportunites for Washington State 77 78 Biomethane for Transportation: Opportunites for Washington State References

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80 Biomethane for Transportation: Opportunites for Washington State Biomethane for Transportation: Opportunites for Washington State 81